* World shares add to last week's losses
* European shares flat, Japan down 2.31 percent
* Dollar slips after gains
By Jeremy Gaunt, European Investment Correspondent
LONDON, Nov 2 (Reuters) - World stocks added to the previous
week's losses on Monday, hugging one-month lows as investors
pulled back from a more than seven month rally and prepared for
the eventual withdrawal of stimulative monetary policy.
The dollar slipped against major currencies after enjoying
its biggest weekly gain since early June.
Investors were bracing for a week of meetings at major
central banks, including the U.S. Federal Reserve and European
Central Bank, the release of minutes from the past meetings of
others and a G20 finance ministers' meeting. []
At issue in all cases is the future of the liquidity that
has been behind much of this year's financial market recovery,
in the form of low interest rates and quantitative easing
designed to pump money into the financial system.
"It's central bank week," said one bond trader.
News that CIT Group INC <CIT.N>, a U.S. lender to hundreds
of thousands of small and medium-sized businesses, finally filed
for bankruptcy on Sunday, also underscored the continuing
fragility of parts of the financial sector [].
World stocks as measured by MSCI <.MIWD00000PUS> were down
0.3 percent, adding to last week's more than 4 percent loss, the
largest since early March just before the rally began. Emerging
market stocks <.MSCIEF> lost 0.6 percent.
European shares hit a four-week low on Monday, extending the
previous session's sharp declines, but later recovered a bit.
The FTSEurofirst 300 <> index of top European shares was
flat. It fell 2.1 percent on Friday.
"Everybody is anxious and knows that the market went a
little bit too fast," said Koen De Leus, economist at KBC
Securities.
Earlier, Japan's Nikkei stock average <> fell 2.3
percent to hit a three-week closing low.
DOLLAR DITHERS
The dollar was flat against a basket of major currencies
<.DXY>, but only after gaining more than 1 percent last week,
its best performance since the week ending June 7.
The currency has lost 6 percent this year as investors have
deserted it for higher-yielding competitors and returned to
non-U.S. stock markets after last year's flight.
The euro was up 0.4 percent at $1.4771 <EUR=> but the dollar
gained slightly against the yen <JPY=> and rose 0.4 percent
against the pound to $1.6374 <GBP=>.
Euro zone bonds were mixed, with demand stronger for
shorter-dated debt.
(Additional reporting by Atul Prakash and Kirsten Donovan;
Editing by Ruth Pitchford)
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