GLOBAL MARKETS-Oil prices, global econ worries hit Asia

* Oil prices rise above $126 a barrel

* Asian stocks hit on inflation and global growth worries

* Gold gains, benefits from safe-haven appeal (Repeats to more subscribers with no change to text)

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 of growing signs that a downturn in the U.S. economy is spreading worldwide.

Fears of a looming recession in the world's top economy dented shares of Asian manufacturers that rely on U.S. demand, such as Toyota Motor, after data on Friday showed another contraction in U.S. employment and a steep loss at auto maker General Motors Corp (GM.N).

European shares were seen headed for a third consecutive session of losses, with investors also bracing for results from HSBC (HSBA.L) and Fortis (FOR.BR) for insight on the impact of the credit crisis on the financial sector.

The dollar dipped against the euro, but still remains near a five-week high as investors sell other major currencies amid expectations problems stemming from U.S. credit and housing woes will affect other countries as well.

Gold rose, regaining its safe-haven appeal, especially amid caution ahead of central bank policy meetings this week, including in the United States, while Japanese government bond futures (JGB) hit a four-month high amid the uncertainty.

"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 fell 0.7 percent at 0600 GMT.

South Korea's KOSPI index dropped 2 percent after a batch of recently cancelled orders sent shipbuilder shares, such as Daewoo Shipbuilding and Marine Engineering (042660.KS) plunging, in another sign of slowing global demand.

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

Tokyo's Nikkei index .N225 fell 1.2 percent, dragged down by the shares in auto makers: Honda Motor (7267.T) fell 5.75 percent while Toyota (7203.T) lost more than 3 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. [ID:nN01429062]