* Oil dips on Iran nuclear deal
* World share markets gain, Wall St edges higher
* Yen drops to six-month low vs dollar as Nikkei surges
By Herbert Lash
NEW YORK, Nov 25 The deal to curb Iran's nuclear program prompted oil prices to fall and world equity markets to rise on Monday as investors priced in an easing of Mideast political tensions and the lift it could give to global economic growth.
The breakthrough accord reached over the weekend in Geneva halts Iran's most sensitive nuclear activities and gives it some relief from crippling sanctions, but does not allow the OPEC member to boost oil sales for six months.
The interim pact - aimed at easing a decades-old stand-off between Iran and the United States - won the critical endorsement of Iranian cleric Supreme Leader Ayatollah Ali Khamenei. France, Britain, China, Russia and Germany also agreed to the accord.
Despite tough work ahead to transform the agreement into a permanent solution, it was enough to ease oil supply fears and send Brent crude down $1.69 to $108.36. Crude prices pared losses after hitting a session low of $108.05 on expectations markets will not be awash in new supply.
"The deal is a step in the right direction, but it's still very early days," said Amrita Sen, chief analyst at consultants Energy Aspects in London.
"That's why, after the knee-jerk reaction, the market is stabilizing. It's realizing, at least in the next few months, there's not going to be a substantial increase in oil exports."
Equity markets in Europe also pared some gains and Wall Street edged higher.
Global equity markets, as measured by MSCI's all-country world index of 45 countries, rose 0.13 percent, while the pan-European FTSEurofirst 300 of leading regional shares was up 0.41 percent.
The Dow Jones industrial average rose 31.60 points, or 0.20 percent, at 16,096.37. The Standard & Poor's 500 Index was up 0.78 points, or 0.04 percent, at 1,805.54. The Nasdaq Composite Index was up 1.78 points, or 0.04 percent, at 3,993.43.
Energy shares were by far the weakest on the day, dropping 0.83 percent. Almost all 44 components of the index were lower. Among the most active names, WPX Energy Inc fell 2.3 percent to $18.53, and Newfield Exploration lost 2.90 percent to $29.16.
"Less tension in the Middle East is always a positive, and any drop in gas prices will essentially act as a tax break for consumers going into the holiday shopping season," said Jeff Duncan, chief executive of Duncan Financial Management in St. Louis. "This is a real benefit for the economy."
U.S. trading is expected to be light this week, with markets closed on Thursday for the Thanksgiving holiday and early on Friday.
In Japan, a major oil importer, shares got an extra boost from a weaker yen to surge 1.5 percent. The Nikkei average has gained almost 11 percent in a little more than two weeks.
The Japanese currency, which typically falls when share prices rise, had touched a sixth-month low of 101.91 yen to the dollar as investors sold it to buy higher-yielding assets elsewhere.
The dollar last traded up 0.36 percent at 101.63 yen.
The fall in oil prices weighed on most commodity-linked currencies, with the Canadian dollar dropping to a 4 1/2-month low of C$1.0584. Against an index of six major currencies, the dollar was 0.31 percent higher.
Prices of U.S. Treasuries edged up slightly as housing data proved weaker than expected.
The 10-year U.S. Treasury note rose 4/32 in price to yield 2.7373 percent.
Contracts to buy previously owned U.S. homes fell for a fifth straight month in October, hitting a 10-month low and adding to signs of cooling in the housing market.