CORRECTED - CORRECTED-GLOBAL MARKETS-Oil prices, global econ worries hit Asi

* Oil prices rise, above $126 a barrel

* Asian stocks hit on inflation and global growth worries

* Gold gains, benefits from safe-haven appeal (Corrects to read European Central Bank is expected to keep interest rates on hold at its meeting on Thursday, not raise them)

By Rafael Nam

HONG KONG, Aug 4 (Reuters) - Asian stocks fell on Monday as a rebound in oil prices to above $126 revived inflation concerns at a time when major economies such as the United States and Japan are already seen headed for tough times.

A steep quarterly loss at U.S auto maker General Motors Corp (GM.N) and a contraction in U.S jobs announced on Friday spell trouble for Asian manufacturers which rely heavily on U.S. demand.

The dollar dipped against the yen but held near Friday's five-week high against the euro as investors sold other major currencies amid mounting evidence that the U.S. credit and housing woes are spreading to other parts of the world.

Gold regained its safe-haven appeal to rise on Monday, though regional bonds dipped ahead of a slew of central bank policy meetings this week including in South Korea, Australia and the United States.

The confluence of negative factors are pointing to a continued period of market volatility, analysts said.

"The still-high oil price, slowing growth virtually everywhere, profit downgrades, inflation worries and the continuing credit crunch are all big short-term headwinds for shares and are likely to ensure a rough ride," said Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors in Sydney.

The MSCI index of Asian stocks outside Japan .MIAPJ0000PUS was down 0.8 percent at 0230 GMT.

South Korean stocks suffered a steep fall, with the KOSPI index down 2.3 percent after a recent batch of cancelled orders sent shipbuilder shares such as Daewoo Shipbuilding and Marine Engineering (042660.KS) plunging.

Shares in Shanghai .SSEC, Singapore .FTSTI and Hong Kong .HSI were all down around 1 percent, while benchmark stock indices in Australia .AXJO and Taiwan were little changed.

Tokyo's Nikkei index .N225 fell 1 percent as Japanese auto makers Honda Motor (7267.T) and Toyota Motor (7203.T) slipped on worries about reduced U.S. demand for their vehicles. Honda fell more than 5 percent, while Toyota fell nearly 4 percent.

U.S. RECESSION?

Concerns about a possible U.S. recession were reinforced by data on Friday showing the unemployment rate hit its highest in four years in July, as employers cut jobs for a seventh consecutive month, though less severely than expected. [ID:nN01429062