* Europe reverses to lose 0.9 percent
* Wall Street set for poor start
* Investors expecting rate cuts from ECB, BoE, RBA
* Dollar weaker
By Jeremy Gaunt, European Investment Correspondent
LONDON, Nov 3 (Reuters) - Global stocks kicked off a new
month with gains on Monday but Europe reversed to trade lower
and Wall Street looked set to have a poor start.
The dollar recouped some of its earlier losses in the
see-sawing trend that has followed the global appetite for
stocks.
Investors have been cautiously shopping for bargains after
shares and commodity prices posted their biggest decline ever in
October on fears of a deep recession in the world economy.
MSCI's all-country world stock index <.MIWD00000PUS> lost
19.9 percent for the month, the largest monthly fall in the
benchmark's 20-year history in its current form.
Reflecting the current volatility in markets, however, the
index was up more than 11 percent last week, its best
performance in 20 years. []
On Monday, the index was up nearly 0.5 percent, mainly on
the back of Asian shares. The emerging market counterpart index
<.MSCIEF> gained 2 percent.
But European investors could not hang on to solid, early
gains and the FTSEurofirst 300 <> was down 0.7 percent
with oil and gas shares falling as the price of crude oil <CLc1>
fell more than $1.20 to $66.60 a barrel.
Index heavyweight Vodafone was also down sharply on worries
about rumours it was guiding analysts to have lower
expectations. The company declined to comment on the rumour.
Japan's stock markets were closed for a holiday.
RATE CUTS AHEAD
Much of Monday's early sentiment was driven by expectations
of lower interest rates from central banks concerned about
tumbling growth and tight lending markets.
The European Central Bank, the Bank of England and the
Reserve Bank of Australia are all expected to lower rates this
week to support their struggling economies.
They are all seen easing by at least 50 basis points. Last
week, the U.S. Federal Reserve cut its key rate by 50 basis
points to 1 percent and the Bank of Japan (BoJ) cut its rate to
0.30 percent from 0.50 percent.
Emerging giants China and India also cut rates last week.
"You saw action from the Fed, action from the Bank of Japan,
action from other central banks around the word ... so the
expectation is high that the ECB will cut rates," said
Heinz-Gerd Sonnenschein, equity strategist at Postbank in Bonn,
Germany.
The euro and other high-yielding currencies such as sterling
gained against the dollar.
High-yielders tumbled sharply last month as investors fled
riskier assets and were forced to shed assets to raise funds,
repatriated back into the dollar and yen. The euro saw its
biggest monthly fall against the dollar and yen since the single
currency's inception in 1999.
On Monday, however, the euro was up 0.6 percent at $1.2806
<EUR=> and up 0.6 percent at 126.11 yen <EURJPY=>. Both of these
numbers were off earlier highs.
The dollar also reversed earlier gains against the yen and
was flat at 98.460 yen <JPY=>.
Euro zone government bond yields were mixed.
Two-year bond yields <EU2YT=RR> were flat at 2.558 percent.
Ten-year yields <EU10YT=RR>, however, were 8 basis points lower
at 3.814 percent.
(Additional reporting by Rebekah Curtis; editing by Toby
Chopra)
