World stock and oil prices fell on Monday on growing concerns of slowdowns in the United States and China -- the two main pillars of global growth, though the dollar was off its two-month low.

Trading was expected to be light on Monday because of the U.S. Independence Day holiday.

Data showing the U.S. labor market shrank for the first time this year in June, slower Chinese manufacturing activity and euro zone austerity measures fueled concerns over prospects for the global economy.

Double-dip (recession) fears are the pervading influence on market psychology at present even as European sovereign (debt) concerns appear to be easing, said Mitul Kotecha, global head of foreign exchange strategy at Credit Agricole CIB in Hong Kong.

World stocks measured by MSCI All-Country World Index <.MIWD00000PUS> dipped 0.2 percent after losing nearly 4 percent last week. The index has lost 16.2 percent since mid-April, and is down 11 percent for the year.

The index carried a one-year forward price-to-earnings ratio of 11.9, a level last seen in April 2009 and well below its 10-year average of 15.42, according to Thomson Reuters DataStream.

By comparison, MSCI emerging equities index <.MSCIEF> had a one-year forward P/E of 10.76, in line with its 10-year average of 10.8, DataStream showed.

Europe's FTSEurofirst 300 <.FTEU3> drifted 0.1 percent lower, with the continent's banks <.SX7P> losing 0.5 percent.

French Economy Minister Christine Lagarde said on Saturday that stress test results to be published on July 23 will show that banks in Europe are solid and healthy.

However, there is a certain amount of skepticism that the stress tests (on banks) ... will either be fudged or the complete results won't be published. What we need is clarity, said Felicity Smith, fund manager at Bedlam Asset Management.

In Asia, Tokyo's Nikkei average <.N225> put on 0.7 percent, while the Shanghai Composite Index <.SSEC> dropped 0.8 percent. Brazil's Bovespa index <.BVSP> slipped 0.2 percent.

DOLLAR NEAR 2-MONTH LOW

The dollar <.DXY> added 0.3 percent against a basket of major currencies, recovering from a near two-month low as traders held back given the U.S. market holiday. The dollar index lost 1.9 percent in the previous two sessions.

The euro paused after last week's boost from unwinding of short and leveraged positions. It slipped 0.3 percent to $1.2521 and dipped 0.3 percent to 109.87 yen.

The shared European currency has lost 12.5 percent against the dollar so far this year, though attention now appears to have turned to concerns of a slowdown in the United States and away from the euro zone's banking and government debt woes.

The market last week was clearly concerned about a U.S. slowdown. It was the first week in a long time we have seen the dollar react like that, said Chris Turner, head of foreign exchange strategy at ING.

There is a creeping fear that the strong dollar environment will start to break. That has not happened yet and it is likely to be steady this week.

BNP Paribas said investors can cheaply hedge a cross-asset portfolio against the risk of a double dip in global growth with currencies. In a note, it recommended investors short a basket of 2/3 Australian dollar and 1/3 New Zealand dollar and long a mix of Swiss franc and yen.

Global growth worries also sent German government bond futures 44 ticks higher to 129.75 from Friday's settlement close, and yields on benchmark 10-year Bunds fell 2 basis points to 2.545 percent.

In the commodity market, crude prices fell 0.4 percent to below $72 a barrel, extending last week's 8.4 percent drops.

(Additional reporting by Kevin Plumberg in Hong Kong, Charlotte Cooper in Tokyo, and Atul Prakash, Lin Noueihed and George Matlock in London; Graphics by Scott Barber; Editing by Toby Chopra)

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