GLOBAL MARKETS-World stocks routed on fears for economy

(Updates to European close, adds detail)

By Jeremy Gaunt, European Investment Correspondent

LONDON, Jan 21 (Reuters) - World stocks nosedived and demand for safe-haven bonds and currencies soared on Monday as fears gripped investors that a deteriorating U.S. economy would drag others down with it.

The losses on the blue-chip stock indexes of Germany, Britain and France alone amounted to more than $350 billion, or roughly the size of the combined economies of New Zealand, Hungary and Singapore.

MSCI's main world stock index .MIWD00000PUS, a benchmark gauge of stock markets globally, sank 3.3 percent, falling below its 2007 bottom to lows last seen in December 2006 and taking it down more than 12 percent so far this year.

Its emerging market equities counterpart .MSICEF lost more than 5.5 percent. Meanwhile, the spread between emerging market bond yields and U.S. Treasury yields, a key gauge of risk appetite, was just off its widest in two years.

"Weak global economic data, poor corporate data, increasing fears about the possibility of a recession ... have left investors drowning in a sea of red," said Henk Potts, equity strategist at Barclays Stockbrokers.

The pan-European FTSEurofirst 300 closed down 5.8 percent, taking its 2008 year-to-date losses to more than 15 percent.

U.S. stock markets were closed on Monday for a holiday, but U.S. stock index futures were down sharply suggesting investors were not putting much hope on Wall Street leading a rebound when it returns to business.