* A global sell-off pushes world stocks to 5-month low
* ECB raises rates as expected, US jobs data due
* Oil rises above $145, stokes inflation fears
By Natsuko Waki
LONDON, July 3 (Reuters) - A global sell-off knocked world
shares to a five-month low on Thursday as surging oil fanned
concerns about inflation and slowing growth with investors
looking ahead to a key U.S. jobs report.
The European Central Bank became the first G7 central bank
to raise interest rates since the credit crisis erupted last
August, raising the euro zone's benchmark cost of borrowing to
4.25 percent.
Investors are keen to hear if more rate rises are in the
pipeline from ECB President Jean-Claude Trichet who gives a news
conference at 1230, the same time U.S. non-farm payrolls are
released.
"We are now waiting for Trichet... if he talks about further
upside risks to inflation then everybody will assume that
further rate hikes are possible," said Tom Vosa, head of market
economics at nabCapital.
Tightening comes as the global economy struggles with the
chilling effects of almost a year of financial turmoil.
"This has been a summer of thunder storms that have been
building up for some time," said Justin Urquhart Stewart,
investment director at Seven Investment Management.
"Only now are people beginning to realise quite how dark
this particular storm is looking, but it's been a long time
coming."
The FTSEurofirst 300 index <> was down 0.7 percent,
having hit a level not seen since July 2005. MSCI's main world
equity index <.MIWD00000PUS> fell 0.5 percent to its lowest
since Jan. 23.
The gloom was all-pervasive, with Tokyo stocks setting their
longest losing streak in more than half a century.
On Wall Street, the Dow has sunk into a bear market -- a
fall of 20 percent from peaks. On Thursday, U.S. stock futures
<SPc1> were indicating a weaker open on main indexes later.
In the currency market, the euro benefited from expectations
for more interest rate hikes from the ECB, while the dollar fell
as low as $1.5902 per euro <EUR=>.
A weaker dollar -- which policymakers increasingly worry is
inflationary -- pushed crude oil <CLc1> to fresh record highs
above $145 a barrel.
A senior Japanese government official said leaders from
Group of Eight rich nations will discuss concerns that a weak
U.S. dollar is a contributing factor to oil prices when they
gather next week in Japan.
Emerging sovereign spreads <11EMJ> widened 3 basis points
while emerging stocks <.MSCIEF> fell 1.8 percent.
The September Bund future <FGBLU8> fell 15 ticks. Safe-haven
government bonds, which usually benefit from risk aversion, fell
because investors anticipated higher yields. A quarter-point
interest rate hike and hawkish comments from Sweden's central
bank also depressed European government bonds.
Gold <XAU=> rose to $945.70 an ounce, its highest in almost
2-1/2 months.
(Additional reporting by Toni Vorobyova and Rebekah Curtis;
Editing by Ruth Pitchford)
