GLOBAL MARKETS-Stocks down for 4th day; dollar subdued

* World stocks ease, down for 4th session

* MSCI World P/E falls to level last seen in April 2009

* Double-dip fears in focus as China, U.S. slow

* Dollar just above two-month lows

By Dominic Lau

LONDON, July 5 (Reuters) - World equities fell for the fourth day running on Monday and the dollar traded close to two-month lows on growing concerns of slowdowns in the United States and China -- the two main pillars of global growth.

Trading was expected to be light on Monday because of the U.S. Independence Day holiday.

The U.S. labour market, which shrank for the first time this year in June, slower Chinese manufacturing activity and euro zone austerity measures fuelled concerns over prospects for the global economy.

"Double-dip (recession) fears are the pervading influence on market psychology at present even as European sovereign (debt) concerns appear to be easing," said Mitul Kotecha, global head of foreign exchange strategy at Credit Agricole CIB in Hong Kong. World stocks measured by MSCI All-Country World Index .MIWD00000PUS drifted 0.1 percent lower after three consecutive sessions of declines. The index has lost 16 percent since mid-April, and is down 11 percent for the year.

The index carried a one-year forward price-to-earnings ratio of 11.9, a level last seen in April 2009 and well below its 10-year average of 15.42, according to Thomson Reuters DataStream.

Europe's FTSEurofirst 300 .FTEU3 slipped 0.2 percent, with the continent's banks .SX7P falling 0.6 percent.

French Economy Minister Christine Lagarde said on Saturday that stress test results to be published on July 23 will show that "banks in Europe are solid and healthy."

In Asia, Tokyo's Nikkei average .N225 put on 0.7 percent, while the Shanghai Composite Index .SSEC dropped 0.8 percent. DOLLAR NEAR TWO-MONTH LOW

The dollar .DXY added 0.1 percent against a basket of major currencies, recovering slightly from a near two-month low as traders held back from chasing the greenback lower given the U.S. market holiday.

The euro paused after last week's boost from unwinding of short and leveraged positions. It slipped 0.2 percent to $1.2534 EUR= and dipped 0.2 percent to 110.07 yen EURJPY=R.

The single European currency has lost 12.4 percent against the U.S. currency so far this year, though attention now appears to have turned to concerns of a slowdown in the United States and away from the euro zone's banking and government debt woes.

"The dollar is responding to weak signs in the U.S. economy," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.

BNP Paribas said investors can cheaply hedge a cross-asset portfolio against the risk of a double dip in global growth with currencies as the foreign exchange market has deep liquidity and cheap implied volatility.

In a note, it recommended investors short a basket of 2/3 Australian dollar AUF=D4 and 1/3 New Zealand dollar NZD= and long a mix of Swiss franc CHF= and yen JPY=.

Global growth worries also sent German Bund futures FGBLc1 41 ticks higher to 129.72 from Friday's settlement close, and yields on benchmark 10-year Bunds EU10YT=RR fell 4 basis points to 2.547 percent.

(Additional reporting by Kevin Plumberg in Hong Kong, Charlotte Cooper in Tokyo, and Tamawa Desai and George Matlock in London; editing by John Stonestreet)