* MSCI world index down 1 percent at 217.84
* Grim PMIs push stocks lower in Asia, Europe
* Yen surges, 10-year US Treasury yield at 50-yr low
By Natsuko Waki
LONDON, Dec 1 (Reuters) - World stocks ended six consecutive days of gains on Monday and oil prices tumbled, boosting flows into the low-yielding yen as data showing slumping manufacturing activity in China and Europe fanned concerns over the economy.
U.S. Treasury prices rose across the board, driving the benchmark 10-year yield to a fresh five-decade low as investors flocked to safe and liquid government bonds.
A closely-watched survey showed euro zone manufacturing activity sank to a level not seen in its 11-year history in November. The grim reading reinforced expectations the European Central Bank would cut interest rates later this week to 2.5 percent or even lower.
A similar survey from China also showed the manufacturing sector deteriorated.
"The data is just so terribly poor that it's going to be difficult for any kind of period of sustained uptrend in confidence," said Derek Halpenny, European head of global currency research at BTM UFJ.
"Until we're through the deterioration in the data then the likelihood is that risk aversion will remain elevated and we'll see renewed interest in lower-yielding currencies."
The MSCI world equity index fell 1.1 percent after rising 12 percent last week.
The FTSEurofirst 300 index of leading European shares fell 3 percent following a gain of more than 13 percent last week, with banks and mining companies leading the way down.
Equity markets had perked up last week after the U.S. government rescued banking giant Citigroup, the Federal Reserve said it would buy up to $800 billion of mortgage-related and consumer debt and China cut interest rates.
Trading was subdued due to the U.S. Thanksgiving holiday last week, but fund tracker EPFR Global said there were sizeable inflows into European equity funds in the week.
Oil dropped by more than 5 percent to $51.57 a barrel after producer cartel OPEC decided to delay a decision on a third supply cut until its next meeting later in December, as economic woes squeeze oil demand.
YEN OUTPERFORMS
The low-yielding yen rose around 1.8 percent to 93.78 yen, only a few yen away from the level where finance chiefs from the Group of Seven issued a warning about excessive yen strength in October.
The Australian dollar fell 2 percent against the U.S. dollar , the New Zealand dollar dropped 3 percent and the pound weakened by more than 1 percent.
The yuan also tumbled against the dollar, heading for its biggest daily decline since its peg to the dollar was abolished in July 2005, on speculation China might adjust foreign exchange policy, permitting more yuan weakness, to stimulate its economy.
A gauge of manufacturing activity in China showed the sharpest monthly contraction in the data series' 4-1/2-year history on plunging new orders for export goods.
"The crucial question no longer is whether or not a global recession has started, but rather how long it will last," said Bank of America in a client note.
The 10-year Treasury yield hit a 50-year low of 2.857 percent. In Europe, the December Bund future rose 73 ticks on the day.
Interest rate futures are fully pricing in the chance that the ECB would lower the cost of borrowing by 75 basis points on Thursday but some analysts are anticipating an even deeper cut as inflationary pressures ease across the region. (Additional reporting by Veronica Brown; editing by Stephen Nisbet)