* Global stocks flat; dollar rebounds, bonds rise
* Oil falls, trades around $53 a barrel
* Europe shares down 0.6 percent, Japan up 1.7 percent
* Wall Street facing poor start
By Jeremy Gaunt, European Investment Correspondent
LONDON, Nov 28 (Reuters) - A weaker oil price reflecting poor economic demand ahead shut off a rally in world stocks on Friday while government bond yields sank and the dollar recovered from early losses.
Oil fell below $54 a barrel, on course to end the month down more than 20 percent, as OPEC ministers prepared to meet in Cairo to discuss potential further supply cuts to counter a global fall in demand.
India's rupee weakened as a siege in Mumbai between police and Islamist gunmen continued, while the benchmark 10-year bond yield fell to its lowest level in three years on expectations that the economic impact of the attacks will give an impetus to rate cuts.
Globally, the MSCI all-country world index fell 0.3 percent, although it has gained more than 10 percent this week, the first weekly gain in four weeks.
"On a range of measures, there is undoubted value to be found in many of the world's equity markets," said Sarah Arkle, chief investment officer with Threadneedle Asset Management.
But economic worries held back an earlier rally.
The pan-European FTSEurofirst 300 was down 0.7 percent, led lower by oil-related companies.
Earlier, Japan's Nikkei average climbed 1.7 percent for its best week in a month. It gained 138.88 points to 8,512.27, while the broader Topix was up 0.7 percent to 834.82.
A monthly Reuters survey found that Japanese retail investors became slightly less pessimistic about domestic equities in November, fitting with other signs globally that recent market sell offs may be bottoming at least temporarily.
OPEC TO MEET
Oil fell below $53 a barrel for a while before recovering slightly. The Organization of the Petroleum Exporting Countries is to hold an informal meeting on Saturday in Cairo, as it struggles to slice output fast enough to keep pace with a recessionary reduction in fuel demand in the West that has sent crude prices down nearly two-thirds since July. U.S. light crude for January delivery stood at $53.67 a barrel, down 76 cents.
The dollar regained traction against major currencies after early losses.
It was 0.8 percent higher against a basket of six major currencies, while the euro lost 1.3 percent to $1.2725. The dollar was flat at 95.40 yen.
Euro zone government bonds rose, reflecting concern about the economy and expectations of interest rate cuts. Two-year Schatz yields sank 12 basis points to 2.218 percent.
(Editing by Ruth Pitchford)