* Greek crisis and contagion fears hit markets
* Global stocks lower, emerging markets lead the way
* Euro hits 14-month low against dollar before recovering
By Jeremy Gaunt, European Investment Correspondent
LONDON, May 5 (Reuters) - World shares fell and the euro
came under renewed pressure on Thursday in what is shaping up to
be a major flight to safety by investors fearful that the Greek
debt crisis is gaining momentum.
Wall Street looked set for a tentative start, despite some
gains on European bourses.
Emerging markets, many of which are in reasonable economic
shape and relatively removed from euro zone stress, were
particularly hard hit, with shares <.MSCIEF> down 1.5 percent.
MSCI's all-country world stock index <.MIWD00000PUS> was
down three-quarters of a percent.
Europe's FTSEurofirst 300 <> index fell in early
trading but then put in modest gains after strong results from
BNP Paribas <BNPP.PA>. It was up 0.3 percent.
Japan's Nikkei <> tumbled more than 3 percent, catching
up with other bourses after a three-day holiday.
"There's no let-up in concerns that the euro zone debt
crisis could continue to worsen and as a result equity markets
across the globe remain under pressure," said Ben Potter,
analyst at IG Markets.
"The bull market always had to end somewhere and it looks
like this could be the trigger."
Focus was on the European Central Bank, which left interest
rates unchanged but was expected later to address the crisis,
which saw deadly riots in Athens on Wednesday and pressure
building on Spain, Portugal and others.
"The ECB president will have to justify his recent decision
to accept Greek bonds indefinitely as collateral regardless of
their credit rating," Brown Brothers Harriman said in a note.
EURO WOE
The euro tumbled to a 14-month low against the dollar.
European policymakers have warned the euro's survival
depends on a life-support package for Greece agreed last
weekend. This has ratcheted up risk aversion and boosted
safe-haven demand for the dollar, pushing it to a one-year high
versus a currency basket.
"The driver remains concerns about the European situation,
coupled with poor risk sentiment," said Kasper Kirkegaard,
currency strategist at Danske in Copenhagen.
The euro fell as low as $1.2717, its weakest since March
2009.
The common currency plumbed a one-year low against the yen
of 118.85 yen <EURJPY=R> on EBS, but recovered a bit to 119.7
yen.
Euro zone government bond yields were mixed with demand for
short-term benchmark debt rising.
(Additional reporting by Naomi Tajitsu; editing by John
Stonestreet/Toby Chopra)
