* MSCI world equity index down 0.4 percent at 340.65
* Renewed rise in oil prices fan concerns
* Dollar steady ahead of key central bank policy meetings
By Natsuko Waki
LONDON, Aug 4 (Reuters) - World stocks slipped on Monday as
oil's renewed rise fanned concerns about its impact on
corporates and consumers in a week when the Federal Reserve and
other major central banks meet to decide on interest rates.
Wall Street fell on Friday after General Motors <GM.N>
reported a $15.5 billion quarterly loss -- the third largest in
its 100-year history -- as sales dropped, highlighting how
rising oil prices are hurting consumer spending.
None of the central banks in the United States, euro zone,
the UK and Australia is set to change the cost of the borrowing
this week as they face slowing growth due to the credit crisis
and rising price pressures given high energy prices.
Oil rose back above $126 a barrel at one point on Monday on
supply worries, lifted by concern over Iran's nuclear
activities, a tropical storm that has formed near the Gulf of
Mexico and further violence in OPEC member Nigeria.
"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 National Australia Bank in Melbourne.
After scoring one of the historically steepest falls from a
record high above $147 in July, U.S. light crude <CLc1> rose
0.75 percent to $126.04 a barrel before losing some its gains to
$125.52 at 0820 GMT.
The United States said on Sunday that Iran had left the U.N.
Security Council no choice but to increase sanctions on the
Islamic republic for ignoring demands that it halt sensitive
nuclear activities, stirring concerns of a potential
confrontation that could disrupt supply.
The FTSEurofirst 300 index <> fell 0.3 percent while
the MSCI main world equity index <.MIWD00000PUS> lost 0.4
percent to hit its weakest level in almost a week.
Financial stocks weakened in Europe ahead of the results
from HSBC <HSBA.L>, Europe's biggest bank.
This week marks the final peak week for second quarter
earnings reports in the United States.
According to Thomson Reuters data, the second quarter
blended growth rate for S&P 500 firms, which combines actual
numbers for companies that have reported and estimates for
companies yet to report, stands at -20.4 percent.
If this rate is confirmed as the final number, it will mark
the first time the S&P 500 has recorded four consecutive
quarters of negative growth since Q2 2001-Q1 2002.
CENTRAL BANKS MEET
Central banks reminded investors last week of their
determination to tackle the one-year-old crisis by extending
emergency lending facilities for investment banks and expanding
other liquidity programmes to ease strains in the money market.
Although the main central banks look set to leave rates
unchanged this week, investors are keen to know their views on
the fresh market turmoil in July, volatile oil prices and the
impact on the broader economy.
"The economic situation is too weak now for big steps to be
taken -- negative economic surprises from the euro zone are the
most common for the moment, which is a fact the ECB will have to
keep in mind," said Thierry Lacraz, strategist at Pictet in
Geneva.
Some analysts say inflation pressures will eventually
subside as high oil prices would weigh on growth, allowing
central banks to cut interest rates to boost the economy.
"While the ECB thus far have been entirely inflation-
focused, we do not believe they will be immune to the weakening
of growth," said Sean Maloney, rate strategist at Nomura.
"This is especially true as our analysis suggests the
inflation peak may well have been achieved ... barring of course
any dramatic upside reversal to oil/food prices."
The dollar was steady against a basket of major currencies
<.DXY>, surrendering some gains made on Friday after data showed
U.S. companies cut fewer-than-expected jobs.
Among other major currencies, the Australian dollar rose 0.2
percent against the U.S. currency <AUD=> after hitting a 3-month
low on Friday.
It has suffered as investors have been caught off-guard by a
sharp shift in expectations towards interest rate cuts, tumbling
nearly 3 percent against the dollar and yen last week for its
biggest weekly drop since the Bear Stearns investment bank
collapse in March.
Emerging sovereign spreads <11EMJ> tightened 1 basis point
while emerging stocks <.MSCIEF> fell 0.7 percent.
The September Bund future <FGBLU8> rose 22 ticks as
government bonds drew safe-haven demand as stocks weakened.
Gold <XAU=> tracked oil higher to $913.20 an ounce.
(Additional reporting by Sitarama Shankar and Emelia
Sithole-Materise, editing by Stephen Nisbet)
