* MSCI world equity index down 1 pct at 312.71
* Dollar hits one-year high vs euro, 2-1/2 yr high vs pound
* Oil falls below $102 a barrel; gold also falls
By Carolyn Cohn
LONDON, Sept 11 (Reuters) - World equities dropped to their
lowest level in more than two years and the U.S. dollar hit a
one-year high against the euro on Thursday, as investors fretted
over global growth and took refuge in safer assets.
A strong dollar and concerns that the slowing global economy
would dampen demand weighed on oil and commodity prices, with
U.S. crude oil falling towards $102 and gold at 11-month lows.
Markets remained under pressure a day after leading U.S.
investment bank Lehman Brothers posted a $3.93 billion third
quarter loss and unveiled a plan to shed weak assets.
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Global growth and financial concerns have encouraged U.S.
investors to keep money at home, boosting the dollar and
depressing riskier assets.
"Risk aversion is still hitting the markets, and is going to
be there for quite some time," said Carlin Doyle, emerging
markets strategist at State Street.
The MSCI main world equity index <.MIW00000PUS> fell 1.0
percent to its lowest since July 2006, and the FTSEurofirst 300
index <> also dropped more than 1.0 percent, led by
banking shares.
U.S. stock index futures <SPc1> <DJc1> <NDc1> pointed to a
lower open on Wall Street, with Lehman Brothers <LEH.N> dropping
17.2 percent to $6 before the bell on broker downgrades.
The dollar hit a one-year high against the euro at $1.3894
<EUR=> and against an index of currencies <.DXY>, benefitting
from broad risk aversion.
Sterling hit a 2-1/2 year low against the dollar at $1.7448
<GBP=> after Bank of England policymaker David Blanchflower
pointed to a deeper than forecast decline in the UK economy and
rises in unemployment soon.
Worries about the euro zone economy sent the single currency
to its lowest in nearly two years at 148.38 yen <EURJPY=>, but
euro zone government bond futures <FGBLc1> benefited from a safe
haven flow from equities, trimming earlier losses to gain 3
ticks on the day.
"The euro zone economy is looking increasingly gloomy," said
David Tinsley, economist at nabCapital.
"The source of volatility is coming...more from the euro
zone economy rather than the U.S. economy, although there's a
substantial amount of risk there as well."
Emerging sovereign debt spreads were trading at their widest
levels in more than three years at 333 basis points over U.S.
Treasuries <11EMJ>, while benchmark emerging equities <.MSCIEF>
fell 2 percent to the lowest since November 2006.
The strong dollar pushed commodity prices lower. Oil <CLc1>
fell 0.8 percent to $101.93 a barrel, approaching recent
five-month lows. Gold <XAU=> was trading at $743.50 an ounce,
just above earlier 11-month lows.
(Additional reporting by Naomi Tajitsu; editing by Patrick
Graham)
