GLOBAL MARKETS-Stocks tumble as auto, banking woes deepen

                                
* MSCI world equity index down 1.9 percent at 203.27
                                
 * GM and Chrysler concerns and banking woes hit shares
                                
 * Government bonds, yen rally; oil falls
                                
 
                                
 By Natsuko Waki
                                
 LONDON, March 30 (Reuters) - World stocks hit a one-week low
and government bonds rose on Monday after General Motors and
Chrysler edged closer to bankruptcy as their turnaround plans
were rejected and tensions rose in Europe's banking sector.
                                
 The Obama administration's autos task force rejected
multi-billion dollar pleas from the two U.S. automakers for more
funds and warned both could be put through bankruptcy to slash
debts. The auto industry woes are putting more pressure on Group
of 20 leaders as they meet in London this week to discuss
measures to tackle the crisis.
                                
 In the latest sign of global stress, Spain was forced to
bail out regional savings bank Caja Castilla la Mancha, its
first banking rescue since the financial crisis began.
                                
 Fears of a major auto industry failure triggered a 3-percent
fall in European shares and boosted safer instruments, such as
government bonds and the yen.
                                
 "A failure of General Motors would be negative for the other
carmakers, as it would drag along a large number of suppliers,"
said Heino Ruland, strategist at Ruland Research.
MSCI world equity index <.MIWD00000PUS> fell 2 percent,
having risen 4.5 percent last week. The FTSEurofirst 300 index
<.FTEU3> fell 3.3 percent. GM shares fell nearly 19 percent in
Europe <GM.F>.
                                
 Tokyo shares <.N225> fell 4.5 percent, their biggest one-day
fall in over two months, hit by the U.S. auto concerns.
                                
 "The fact that there's still a chance of GM going bankrupt
is shocking," said Takashi Ushio, head of the investment
strategy division at Marusan Securities.
                                
 Britain's Nationwide Building Society said it had acquired
struggling Scottish lender Dunfermline Building Society under a
process conducted by the Bank of England.
                                
 Emerging stocks <.MSCIEF> lost 4 percent. 
                                
 U.S. crude oil <CLc1> fell 3.4 percent to $50.58 a barrel.
                                
 The June bund futures <FGBLc1> rose 50 ticks.
                                
 The yen rose 1.9 percent to 96.17 per dollar <JPY=>. The
euro was down a third of a percent at $1.3179 <EUR=> while the
dollar <.DXY> rose 0.6 percent against a basket of major
currencies.
                                
 
                                
 G20 FOCUS
                                
 Investors are looking to this week's G20 summit to see if
the leaders could bolster confidence in the equity market, which
is on track for its biggest monthly gain in nearly 9 years even
despite Monday's losses.
                                
 The Financial Times newspaper, quoting a draft communique,
said the G20 leaders hope to restore global growth by the end of
2010 but much depends on when the United States pulls out of its
economic tailspin.
                                
 "It is `make or break time' and politicians and central
bankers have to decide to agree or disagree, to find a global
policy response or to continue uncoordinated isolated national
approaches eventually leading to financial and market
protectionism making this crisis even worse," BNP Paribas said
in a note to clients.
 (Additional reporting by Christophe Steitz; editing by David
Stamp)