* MSCI world equity index down 1.9 percent at 183.57
* Stocks, oil fall sharply after HSBC, AIG
* Dollar hits 3-year high; government bonds firmer
By Natsuko Waki
LONDON, March 2 (Reuters) - World stocks fell to nearly six-year lows on Monday and the dollar hit 3-year peaks after a a 12.5 billion pound ($17.75 billion) rights issue by HSBC and another cash injection to U.S. insurer AIG.
Oil fell more than 3 percent while government bonds rose across the board after HSBC, Europe's biggest bank, launched the rights issue to shore up its balance sheet after it reported a 18 percent fall in adjusted pretax profit for 2008 and cut its dividend.
American International Group is set to take a $30 billion lifeline from the U.S. government as the embattled insurer is expected to report the biggest quarterly loss in corporate history of about $60 billion later on Monday.
The AIG move follows a new rescue plan for Citigroup, adding to fears that more financial firms may need similar bailouts.
"There's a roll call of reasons to stay risk averse -- the news from AIG, HSBC and worries about Eastern Europe and that is benefiting the dollar," UBS currency strategist Geoffrey Yu said.
Concerns about the impact of a sharp economic deterioration in Eastern Europe have also weighed on the euro and euro zone stocks in recent weeks.
European Union leaders rejected a mass bailout of central and eastern European countries at a summit on Sunday, but held out the prospect of bringing them under the protection of the euro zone more quickly. MSCI world equity index fell 1.9 percent to hit its lowest level since April 2003. The index lost more than 10 percent last month, compared with a rise of 0.1 percent in February 2008.
The FTSEurofirst 300 index fell 3.2 percent. HSBC shares fell 11 percent in early trade.
The dollar index, which measures the currency's strength against a basket of major currencies, hit its highest level since April 2006. The single currency fell to $1.2562.
March Bund futures rose 65 ticks, benefiting from flows seeking safer investments.
"Clearly the environment for fixed income, Bunds in particularly, is still extremely bullish. We've strong faith in our call that historic low in yields are still ahead of us," Christoph Rieger, short-end rate strategist at Dresdner Kleinwort in Frankfurt.
Emerging stocks fell 3.5 percent and U.S. crude oil fell 3.6 percent to $43.15 a barrel. (Additional reporting by Jessica Mortimer, Veronica Brown and Ian Chua, editing by Mike Peacock)