GLOBAL MARKETS-Oil prices, global econ worries hit Asia

                                
 * Oil prices rise above $126 a barrel
                                
 * Asian stocks hit on inflation and global growth worries
                                
 * Gold gains, benefits from safe-haven appeal
  (Updates with latest Asia prices, European day's outlook)
                                
 By Rafael Nam
                                
 HONG KONG, Aug 4 (Reuters) - Asian stocks fell on Monday as
a rebound in oil prices to above $126 revived inflation
concerns at a time of growing signs that a downturn in the U.S.
economy is spreading worldwide.
                                
 Fears of a looming recession in the world's top economy
dented shares of Asian manufacturers that rely on U.S. demand,
such as Toyota Motor, after data on Friday showed another
contraction in U.S. employment and a steep loss at auto maker
General Motors Corp <GM.N>.
                                
 European shares were seen headed for a third consecutive
session of losses, with investors also bracing for results from
HSBC <HSBA.L> and Fortis <FOR.BR> for insight on the impact of
the credit crisis on the financial sector.
                                
 The dollar dipped against the euro, but still remains near
a five-week high as investors sell other major currencies amid
expectations problems stemming from U.S. credit and housing
woes will affect other countries as well.
                                
 Gold rose, regaining its safe-haven appeal, especially amid
caution ahead of central bank policy meetings this week,
including in the United States, while Japanese government bond
futures (JGB) hit a four-month high amid the uncertainty.
                                
 "The still-high oil price, slowing growth virtually
everywhere, profit downgrades, inflation worries and the
continuing credit crunch are all big short-term headwinds for
shares and are likely to ensure a rough ride," said Shane
Oliver, head of investment strategy and chief economist at AMP
Capital Investors in Sydney.
                                
 The MSCI index of Asian stocks outside Japan
<.MIAPJ0000PUS> fell 0.7 percent at 0600 GMT.
                                
 South Korea's KOSPI <.KS11> index dropped 2 percent after a
batch of recently cancelled orders sent shipbuilder shares,
such as Daewoo Shipbuilding and Marine Engineering <042660.KS>
plunging, in another sign of slowing global demand.
                                
 Shares in Shanghai <.SSEC>, Singapore <.FTSTI> and Hong
Kong <.HSI> were all down around 1 percent, while benchmark
indices in Australia <.AXJO> and Taiwan <.TWII> also fell.
                                
 Tokyo's Nikkei index <.N225> fell 1.2 percent, dragged down
by the shares in auto makers: Honda Motor <7267.T> fell 5.75
percent while Toyota <7203.T> lost more than 3 percent.
                                
 U.S. RECESSION?
                                
 Concerns about a possible U.S. recession were reinforced by
data on Friday showing the unemployment rate hit its highest in
four years in July, as employers cut jobs for a seventh
consecutive month. [ID:nN01429062]
                                
 In a bad omen for corporate profits, General Motors
reported a $15.5 billion quarterly loss on Friday, while data
showed U.S. auto sales plunged to a 16-year low in July.
[ID:nN01288721] and [ID:nN01496226]
                                
 Slowing demand from the world's largest economy is taking a
global toll. Data due out next week is expected to show Japan's
economy probably shrank 0.6 percent in the second quarter,
ending three consecutive quarters of expansion. [ID:nT205687]
                                
 Adding to the global economy woes, oil prices rebounded
amid concerns over Iran's nuclear activities, violence in
Nigeria and a tropical storm in the Gulf of Mexico.
                                
 Oil had tumbled last month amid expectations that record
prices were dampening energy demand.
                                
 U.S. light crude for September deliver <CLc1> was up $1.05
at $126.15, still below the record above $147 a barrel on July
11.
                                
 "We've seen a lot of worries about demand slowing in the
past couple of weeks but now it seems like the focus has
switched back to supply concerns," said Gerard Burg, a
commodities analyst at the National Australian Bank in
Melbourne.
                                
 CENTRAL BANKS' DILEMMA
                                
 How to respond to inflationary pressures and slowing
economic growth is becoming a key debate for central banks,
especially in Asia, where inflation in countries such as India
and the Philippines are seen at their highest in at least a
decade.
                                
 However, in Australia, pressure is mounting for the central
bank to cut rates, if not at its policy meeting on Tuesday then
later this year, as a host of data screams of distress among
households and businesses. [ID:nSYD254758]
                                
 The Australian dollar took a big hit last week by the sharp
shift in expectations towards monetary easing. The Aussie on
Monday was up 0.3 percent at $0.9318 <AUD=D4>, holding near a
three-month low of $0.9285 struck on Friday.
                                
 In other major currencies, the euro edged up 0.1 percent to
$1.5582 <EUR=>, with the U.S. currency little changed against
the yen. <JPY=>
                                
 The worsening outlook for auto makers dented the appeal of
metals such as platinum <XPT=>, with spot prices falling to
$1,615.00/1,617.00 an ounce, its lowest level since late
January.
                                
 But gold <XAU=> rebounded to $914.25/915.25 an ounce from
Friday's $909.85/911.45 as investors sought a safe haven.
Japanese bonds also gained, with September 10-year JGB futures
<2JGBv1> up 0.29 point at 137.01, around its highest since
April.