European stocks lower ahead of Wall St

By Jeremy Gaunt, European Investment Correspondent

LONDON (Reuters) - Global stocks kicked off a new month with gains on Monday but Europe reversed to trade lower and Wall Street looked set to have a poor start.

The dollar recouped some of its earlier losses in the see-sawing trend that has followed the global appetite for stocks.

Investors have been cautiously shopping for bargains after shares and commodity prices posted their biggest decline ever in October on fears of a deep recession in the world economy.

MSCI's all-country world stock index lost 19.9 percent for the month, the largest monthly fall in the benchmark's 20-year history in its current form.

Reflecting the current volatility in markets, however, the index was up more than 11 percent last week, its best performance in 20 years.

On Monday, the index was up nearly 0.5 percent, mainly on the back of Asian shares. The emerging market counterpart index gained 2 percent.

But European investors could not hang on to solid, early gains and the FTSEurofirst 300 was down 0.7 percent with oil and gas shares falling as the price of crude oil fell more than $1.20 to $66.60 a barrel.

Index heavyweight Vodafone was also down sharply on worries about rumours it was guiding analysts to have lower expectations. The company declined to comment on the rumour.