GLOBAL MARKETS-World stocks turn down, euro hit again

* World stocks turn lower as Wall Street open approaches

* Euro falls sharply again after brief rally

By Jeremy Gaunt, European Investment Correspondent

LONDON, May 24 (Reuters) - World stocks failed to hang on to early gains on Monday, falling as Wall Street looked set for losses, and the euro took another hit, dropping more than 1 percent against the dollar.

Global stocks as measured by MSCI <.MIWD00000PUS> were down 0.3 percent, adding to last week's 4.8 percent loss on worries about a slowing global economy and stresses in the euro zone.

Emerging markets stocks <.MSCIEF> were up 0.4 percent, but well off their daily highs. They lost 7.6 percent last week.

European trading was thin due to a religious holiday, but most markets were open. The FTSEurofirst 300 <.FTEU3> turned down as Wall Street futures pointed to losses at the open. It was down 0.5 percent.

"There's a general risk aversion and there has generally been a move to liquidate positions," Martin Fraenkel, Credit Agricole's global head of comnmodities and energy, told a Reuters summit in London.

Equity markets have been battered recently, first by a fear that some European countries, notably Greece, were heading for a default on their sovereign debt and then due to doubts about the impact of a debt rescue package on growth prospects.

Jun Kato, senior manager for investment at Shinkin Asset Management, said while the euro zone's fiscal trouble was still in focus, "wariness about its impact on the global economy seems to be spreading".

Year-to-date, all major broad stock indexes are in the red, although U.S. equities are generally outperforming. This is a reaction both to a flight from Europe and growing signs of U.S. economic recovery.

EURO SLIPPAGE

The euro tumbled 1.6 percent to $1.2374 , reversing a late rally on Friday.

It hit a four-year low of $1.2143 hit last week, but then recovered somewhat.

"Despite the modest rebound towards the end of last week, we expect to see further EUR/USD downside ahead as the euro zone fiscal deficit, public debt, and structural issues remain unresolved despite recent policy initiatives," UBS analysts said in a note.

Euro zone government bonds yields slipped. The two-year Schatz yield was down 2 basis points at 0.466 percent.

Oil reversed early gains and was down slightly at $69.97 a barrel. (Additional reporting by Simon Falush and Naomi Tajitsu; editing by Jason Webb)