By Rafael Nam

HONG KONG (Reuters) - Asian stocks tumbled to multi-month lows on Monday on fears that more bad news could be lurking in the global financial sector, and as oil prices climbed above $136 a barrel on escalating tensions in the Middle East.

Inflation concerns at a time of slowing global economic growth and financial sector woes continues to dampen the mood. World energy powers met for an emergency session at the weekend in Jeddah, Saudi Arabia, but had no quick fix to crude prices that have doubled over the past year.

The prevailing uncertainty kept the dollar rangebound, but lifted most Asian bonds, with exceptions such as in India and South Korea. Investors were also on hold for the U.S. Federal Reserve's policy setting meeting that begins on Tuesday and could give further clues as to U.S. interest rates.

"It is not domestic, it's the continued pain that larger banks are having to confront in the U.S.," said Jamie Spiteri, senior dealer at Shaw Stockbroking.

The MSCI index of Asian stocks outside Japan .MIAPJ0000PUS fell 0.8 percent, after dropping at one point to its lowest since March 25. The index has fallen for five straight weeks and is down more than 17 percent this year.

The losses follow a weak session in Wall Street on Friday, which saw the Dow Jones industrial average .DJI fall to its second-lowest level this year, as expectations that U.S. financial firms will need to raise more capital triggered a guessing game about who will be next.

Global lenders remain under pressure, with Citigroup (C.N: Quote, Profile, Research), the largest U.S. bank, set to slash 6,500 jobs in its investment bank division, the Wall Street Journal said.

The financial crisis has set into motion more U.S. regulatory scrutiny as well. Another Wall Street Journal report said the Fed and the U.S. Securities Exchange Commission were finalising an agreement to start the process of redrawing how Wall Street is regulated.