* Stocks fall on U.S. recession, Europe debt fears
* Leading European stocks down 0.7 percent
* S&P futures 0.3 percent lower, Asia ex-Japan off 1.5 pct
* Gold contines to set fresh highs on safe-haven bets
* Oil falls over 3 pct on hopes for end to Libyan civil war
(Updates throughout, adds European market open)
By Frederik Richter
SINGAPORE, Aug 22 European stocks extended
four weeks of losses on Monday, tracking jittery Asian shares
lower, while gold shot to new highs as investors worried about
the sluggish U.S. economic outlook and Europe's festering debt
The FTSEurofirst 300 index of top European shares
fell 0.7 percent in early trade, tracking Friday's losses on
Wall Street on worries that the U.S. economy may slide back into
Spot gold prices rose more than 1 percent to a record
$1,882.20 per ounce as the shaky global outlook
prompted investors to move more money into safe havens, while
oil prices tumbled on hopes Libya may resume full output soon as
a six-month civil war seemed to be nearing an end.
Japan's Nikkei 225 index fell 1 percent,
with increasing expectations that Tokyo will intervene in forex
markets to weaken the strong yen offsetting growing worries that
the U.S. economy may be sliding back into a recession.
Shares elsewhere in the region as measured by the MSCI Asia
Pacific ex-Japan index fell more than
1 percent, unable to hold on to early advances.
A similar pattern was seen in S&P 500 futures ESc1, which
recoiled from early gains to slip 0.4 percent ,
pointing to more losses in Western markets later in the day.
"Given the economic hurdles faced in Europe and the United
States, an upward trend is hard to sustain," said Park
Yong-myung, a fund manager at Hanhwa Investment Trust
Adding to the bearish tone, European Central Bank Governing
Council member Ewald Nowotny told an Austrian magazine he was
concerned that euro zone countries will not push through
parliamentary approval of changes to their EFSF bailout fund as
quickly as planned.
Member states have to adopt revisions to the European
Financial Stability Facility (EFSF) so that it can take over
from the ECB the job of buying debt of struggling members on
secondary markets if needed.
Khiem Do, head of Asian multi-asset with Baring Asset
Management in Hong Kong, said there would be little visibility
on the direction of markets until it was clear whether the
United States would slide into recession or not.
"The sentiment of markets is very weak at the moment," he
MSCI's world stock index fell 0.5
percent. The index has slipped into a bear market territory by
dropping more than 20 percent from its three-year high in May.
BERNANKE IN FOCUS
A key event this week will be a speech by Federal
Reserve Chairman Ben Bernanke on Aug. 26 in Jackson Hole,
Wyoming, during which he is expected to provide an economic
outlook and hints on how policymakers plan to handle the turmoil
in financial markets.
Bernanke used the same event last year to suggest the Fed
could help growth by buying long-term bonds, but no major
announcements are expected this time.(For a preview of
Bernanke's speech, see )
On Friday, U.S. stocks fell after Hewlett-Packard's
weaker outlook and corporate shakeup added to uncertainty for
investors after a month of bad surprises ranging from a U.S.
credit rating downgrade to a sharp slowdown in world growth.
Markets will also watch data on bond buying by the European
Central Bank and debt issuance by European countries such as
Italy on Tuesday to see if the euro zone's debt crisis is
Also on Tuesday, a raft of preliminary manufacturing data
will shed light on whether economies from China to the euro zone
are continuing to lose momentum, adding to global growth fears.
Brent oil futures LCOc1 tumbled more than 3 percent at one
point to $105.15 a barrel, weighed down by a firmer U.S. dollar
and as the months-long conflict in oil-producing Libya appeared
to enter its decisive phase, with rebel fighters streaming into
the heart of Tripoli.
The dollar index , which tracks the strength of the
greenback against a basket of currencies, rose 0.1 percent.
The dollar surged higher against the yen, but later pared
some of its gains, with traders citing talk that the spike in
the dollar was triggered by bids by a U.S. bank.
The move came as investors were increasingly on edge about
the possibility that Japan may intervene to curb yen strength,
in the wake of the dollar's drop down to a record low around
75.95 yen late last week.
The dollar was largely flat against the yen at 76.71 yen
, having risen to as high as 77.23 yen earlier.
(Additional reporting by Ayai Tomisawa in Tokyo and Ju-min Park
in Seoul; Editing by Kim Coghill and Ramya Venugopal)