* World stocks set to snap 5-session winning streak
* Dollar index recovers a touch from 33-month trough
* Firmer dollar sends crude and copper lower
By Dominic Lau
LONDON, May 3 (Reuters) - World stocks fell on Tuesday as investors pocketed gains after a five-session winning run, while the dollar edged off a 33-month low, sending crude and copper prices lower.
Equities have been buoyed by robust company earnings in the United States and Europe though high commodity prices, driven by ultra-loose U.S. monetary policy and turmoil in oil-producing Middle East and North Africa, could threaten company margins.
World stocks measured by the MSCI All-Country World Index shed 0.6 percent after five sessions of gains, and the emerging share index lost 1.2 percent to a two-week low.
The MSCI world gauge gained 3.9 percent last month, and is up 7.5 percent this year.
"After the strong performance of equity markets over the last months we are expecting to see a flattening in the market in the coming months," Patrik Lang, head of equity research at Julius Baer, said.
"Some of the key forward-looking (economic) indicators are showing weaknesses meaning that the prospect and chance of equity growth over the coming months is limited."
Lang recommended investors should cut their exposure to cyclical stocks and focus on defensives, which are least affected by changes in economic conditions.
U.S. stock index futures lost 0.2 to 0.4 percent, indicating a soft open on Wall Street, and the FTSEurofirst 300 index of leading European shares dropped 0.8 percent, while Asia-Pacific shares excluding Japan fell 1.4 percent.
Nearly 80 percent of 339 S&P 500 companies that have so far reported first-quarter earnings have either beat or met analysts' forecasts, data from Thomson Reuters StarMine showed.
Of the 98 European companies that have reported quarterly results, 56 percent of them either beat or met expectations.
Copper prices eased 1.1 percent and Brent crude lost 1 percent to trade below $124 a barrel.
Analysts said the death of al Qaeda leader Osama bin Laden could reduce the threat against the United States in the long term, but the potential for retaliatory attacks in the short term would support oil prices.
DOLLAR BOUNCES
The dollar index, which tracks the dollar against a basket of major currencies, was up 0.4 percent after hitting a 33-month trough on Monday.
Sentiment for the dollar has been overwhelmingly bearish as near zero U.S. interest rates have made it the funding currency of choice in carry trades that helped propel the Australian dollar to a 29-year high of $1.1012 on Monday.
"In the near term, the dollar's fall could extend further still but levels are now becoming more stretched in terms of valuation and positioning. Momentum indicators are also showing the dollar is very oversold," said Lee Hardman, currency strategist at BTM-UFJ in London.
The Australian dollar dipped 0.6 percent to $1.0872 on Tuesday after the country's central bank kept interest rates unchanged at 4.75 percent as expected, while the Canadian dollar rose after the ruling Conservatives won a crushing victory in a federal election.
The euro was down 0.3 percent at $1.4788, though still up more than 10 percent against the dollar this year.
Credit Suisse said in a note that the common currency could appreciate another 5 to 10 percent before it became a problem for the euro zone economy.
"The current level of the euro is not a significant problem for the real economy. It could probably appreciate by a further 5-10 percent before it became so. That would be consistent with a euro-dollar cross rate of over $1.60," Credit Suisse said. (Additional reporting by Josie Cox in Frankfurt, Neal Armstrong in London and Francis Kan in Singapore, editing by Mike Peacock/Ruth Pitchford)