GLOBAL MARKETS-Syria uncertainty drives up oil, hits stocks
* U.S. lays groundwork for possible action against Syrian government
* Yen broadly firmer; Turkish lira, Indian rupee hit record lows
* Brent oil nears 6-month high, over $112 a barrel
* European equities down 1.2 pct after sharp falls in Asia
LONDON, Aug 27 (Reuters) - Uncertainty about the possibility of Western military action against the Syrian government hit shares worldwide on Tuesday, sent many emerging market currencies to record lows and boosted assets such as yen and gold.
U.S. stock index futures and a rise in U.S. government debt prices signalled that the flight to safety could gather momentum when Wall Street opened.
Dealers said the moves so far, spurred by reports from Washington that a strike may be imminent, were not yet on a huge scale as investors are waiting to see how the situation unfolds.
"The full scope of this crisis is difficult to predict at this point, so it becomes an excuse for investors to cash in some of the recent gains," said David Thebault, head of quantitative sales trading, at Global Equities.
U.S. Secretary of State John Kerry, in the most forceful reaction yet to the Aug. 21 gas attack outside Damascus, set the stage for possible action when he said President Barack Obama "believes there must be accountability for those who would use the world's most heinous weapons against the world's most vulnerable people".
Kerry said Obama was consulting with allies before he decides on any retaliatory strike. While Britain's Prime Minister David Cameron added to the growing sense of imminent action by recalling the country's parliamentarians from their summer break.
The shift into safer assets has benefited the yen most, leaving the greenback down 0.7 percent at just under 98 yen and the Australian dollar down 1.6 percent to 87.50 yen .
The euro fell 1.0 percent against the Japanese currency but was slightly lower against the dollar at $1.3330.
Emerging market currencies such as the Turkish lira and the Indian rupee bore the brunt of the flight as doubts over the Syrian situation added to pressure from investors' positioning for an end to the supply of cheap dollars from the U.S. Federal Reserves monetary stimulus.
The Indian rupee lost as much as 2.5 percent to reach record low of 65.93 per dollar while Turkey's lira weakened to 2.03 to the dollar - both were record lows. Turkey's share index also slid to a year low.
OIL AND SHARES
Brent crude oil for October was over $112 a barrel, nearly a six month high, while U.S. crude was up $1.03 to $106.95 a barrel.
Russia, which as the world's top energy producer normally benefits from stronger oil prices, saw the rouble hit a four-year low against the dollar-euro basket, on concern over the situation in Syria.
As Syria's key ally and arms supplier, Russia has urged Washington not to use military force against President Bashar al-Assad's government. Traders said its response to any U.S. move against Syria would be key to whether the current shift into safer assets turned into a major flood.
European shares were down 1.2 percent by midday, matching an earlier drop across Asian markets outside Japan. Tokyo's Nikkei ended 0.7 percent lower.
That left the MSCI all-country world equity index down around 0.5 percent for a second day of falls, though it remains off its lows for the month.
More evidence that the recovery in Europe's largest economy, Germany, was gathering momentum in the latest monthly survey of sentiment by the influential Ifo think-tank had little impact on market sentiment.
The Ifo institute said its business climate index, based on a survey of some 7,000 firms, rose to a better-than-forecast 107.5 in August, its fourth consecutive rise and the highest level since April 2012.
Germany's main DAX index was down 1.6 percent after the surprisingly strong data, with key French and Italian indexes both around 1.5 percent lower.
Italian shares were experiencing their second day of heavy selling after falling about 0.8 percent on Monday on concern over the stability of the ruling coalition, with Silvio Berlusconi's centre-right party threatening to bring down the government.
The share sell-off in Europe had only minimal impact on 10-year German bond yields, which were a touch lower at 1.87 percent - just off 1-1/2 year highs of 1.98 percent hit last week.
German yields have risen sharply in recent weeks on expectations that an improved global economic outlook could prompt the Federal Reserve to reduce monetary stimulus in September, while other major central banks might struggle to keep their promise to keep interest rates low for a long time.
Spot gold rose to its highest since early June around $1,420 an ounce. Gold has rallied more than $200 since late June when prices troughed at three-year lows.
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