* World stocks down on worries about end of rally
* European shares down 1 percent, Japan 2.4 percent
* Dollar steady against major currencies except yen
By Jeremy Gaunt, European Investment Correspondent
LONDON, Sept 2 (Reuters) - World stocks fell close to 1
percent on Wednesday after an overnight sell off on Wall Street,
with both Asia and Europe rattled by concerns over the
sustainability of this year's equity rally.
The dollar was little changed by the moves.
Anxiety about the health of financials and worries the 2009
global stock market rally may have run its course hit U.S.
stocks hard on Tuesday and then carried over.
Japan's Nikkei <> closed down 2.4 percent for the day
and Europe's FTSEurofirst 300 <> was down 1 percent.
It all took around 0.9 percent off MSCI'S all-country world
stock index <.MIWD00000PUS> and the more-volatile emerging
market component <.MSCIEF> lost 1.4 percent.
Concerns have risen over the summer that stocks have risen
so strongly since March that they are due a correction.
"The rebound from March has been remarkable. Year-to-date
gains for most of the indexes are strong, although we are still
below pre-Lehman Brothers levels," said Valerie Plagnol, chief
strategist at CM-CIC Securities, in Paris.
"But the glass is still half empty. Macro data has improved,
but we're in a pattern of destocking-restocking, and the outlook
for consumer spending is still grim."
As a result, the focus is shifting towards Wall Street,
where the broad S&P 500 index <.SPX> has fallen 3.2 percent with
three consecutive losing sessions.
It fell 2.2 percent on Tuesday.
"The question now is whether Wall Street will consolidate at
this level or fall further," said Mitsushige Akino, chief fund
manager at Ichiyoshi Investment Management.
FOREX STEADY
The euro was little changed, hovering near a two-week low
against the dollar, although the slide in European shares kept
traders wary and risk aversion boosted the yen against most
major currencies.
"We are constructive on data, we are constructive on risk as
well but price action short-term tells us that the market is
already positioned for a recovery," said Carl Hammer, currency
strategist at SEB in Stockholm.
"Maybe we need some more consolidation in the coming days
before moving higher in terms of risk appetite."
The euro was flat at $1.4215 <EUR=> and the dollar lost 0.4
percent against yen to 92.46 yen <JPY=>
Euro zone bond yields were also relatively steady. Two-year
paper <EU2YT=RR> was yielding 1.163 percent and Bunds
<EU10YT=RR> were yielding 3.208 percent.
(Additional reporting by Blaise Robinson, Elaine Lies and
Naomi Tajitsu; editing by Chris Pizzey)
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