* MSCI world equity index down 0.6 percent
* Dollar rises broadly after tensions in Korean peninsula
* Oil falls; euro down on Irish/euro zone jitters
By Natsuko Waki
LONDON, Nov 23 (Reuters) - World stocks fell on Tuesday while the dollar rose across the board after tensions in the Korean peninsula prompted investors to trim risky assets, and the euro stayed under pressure as Ireland's debt crisis raged on.
North Korea fired dozens of artillery shells at a South Korean island, killing two soldiers and setting houses ablaze in one of the heaviest attacks on its neighbour since the Korean War ended in 1953.
The incident soured sentiment in global financial markets already rattled by concerns that a rescue package for Ireland may not stop problems from spreading to other indebted euro zone countries.
In Korea, stock futures and the won tumbled in a late selloff and more downside was expected on Wednesday.
"Tension in the region has led to a knee-jerk reaction in currencies and stocks," said Paul Robson, currency strategist at RBS Global Banking.
"Focus will shift back to the euro and we believe euro zone peripheral issues have some more time to run. Investors will go after Portugal and then Spain after Ireland is done." The MSCI world equity index and the Thomson Reuters global stock index both fell 0.6 percent.
The FTSEurofirst 300 index lost more than half a percent while U.S. stock futures fell around 0.7 percent, pointing to a weaker open on Wall Street.
In Korea, December KOSPI 200 index futures fell 2.4 percent while the dollar rose more than 4 percent against the won in offshore trade before trimming gains.
Emerging stocks dropped 1.7 percent.
U.S. crude oil fell 0.5 percent to $81.27 a barrel.
IRISH JITTERS
Bund futures attracted in safe-haven demand to rise 40 ticks.
Irish and other peripheral government bond yield spreads widened and the cost of insuring higher-yielding euro zone sovereign debt against default rose as markets fretted over whether Ireland's embattled government would be able to pass a budget.
The Irish Prime Minister on Monday defied pressure to quit ahead of the unveiling of an austerity plan later this week and a 2011 budget on Dec. 7, but said he would then call an early election.
"Given that this political uncertainty puts at risk the four-year budget plan, this is definitely not helping the market to move on and look forward," said Michael Leister, strategist at WestLB.
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Ireland requests international bailout Europe debt problems Euro zone debt struggle:
http://r.reuters.com/hyb65p Multimedia on euro zone crisis: http://r.reuters.com/hus75h
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Portugal and Spain are seen as the next weakest links and an official from Portugal's main opposition party said it would allow passage of the minority Socialist government's 2011 budget in the final vote on Nov. 26.
A Spanish tender showed the country's short-term cost of borrowing almost doubling.
Canada's finance minister said on Monday he was pressing the European Union to address the Portuguese debt crisis quickly, although he fell short of saying the country would need a bailout like Ireland.
The dollar gained 0.3 percent against a basket of major currencies while the euro lost half a percent to $1.3552.
(Reporting by Natsuko Waki; Editing by John Stonestreet)