By Rodrigo Campos
NEW YORK, Sept 21 (Reuters) - Stocks across the world hit their lowest in seven weeks and other risk assets sold off on Monday on lingering concern over renewed lockdown measures in Europe and the UK, as well as the United States' inability to agree on a stimulus for millions of unemployed.
Oil prices fell about 5%, the dollar rallied and an index of emerging market currencies fell by the most in six months. The MSCI world equity index .MIWD00000PUS, which tracks shares in 49 countries, touched its lowest level since Aug. 3.
Britain is considering a second national lockdown as new cases rise by at least 6,000 per day while Denmark, Greece and Spain have introduced new restrictions on activity. Germany's health minister said rising new infections in countries like France, Austria and the Netherlands are worrying.
Adding to the market's nervousness, the U.S. presidential campaign was upended late Friday after U.S. Supreme Court Justice and liberal icon Ruth Bader Ginsburg died. President Donald Trump said he would announce his candidate to replace her by the end of this week.
Ginsburg's death also decreases the chances of Congress passing another stimulus package to help lift the domestic economy.
"There's going to be very little bandwidth for putting in a new fiscal bill with this new development," said Tom Martin, senior portfolio manager at GLOBALT Investments in Atlanta.
The Dow Jones Industrial Average .DJIfell 791.58 points, or 2.86%, to 26,865.84, the S&P 500 .SPXlost 72.43 points, or 2.18%, to 3,247.04 and the Nasdaq Composite .IXICdropped 147.46 points, or 1.37%, to 10,645.83.
The pan-European STOXX 600 index .STOXXlost 3.24% and MSCI's gauge of stocks across the globe .MIWD00000PUSshed 2.29%.
Emerging market stocks lost 1.86%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 1.49% lower.
Japan has public holidays on Monday and Tuesday this week, meaning volumes are thin in Asian trading.
Markets were also hit by a media report on how several global banks moved large sums of allegedly illicit funds over nearly two decades.
The S&P banking subindex .SPXBK fell 4.5%.
The dollar rose on Monday after two weeks of declines as investors sought safer currencies.
"What we're seeing here this morning for the dollar is largely a risk-off safe-haven bid," said Erik Bregar, head of FX strategy at Exchange Bank of Canada in Toronto, adding that the trigger was in the European morning on rising fears of a new U.K. nationwide lockdown.
The dollar index =USDrose 0.846%, with the euro EUR=down 0.87% to $1.1734.
The Japanese yen weakened 0.12% versus the greenback at 104.70 per dollar, while Sterling GBP= was last trading at $1.2797, down 0.91% on the day.
Seven members of the Fed will speak this week - including Chairman Jerome Powell appearing before congressional committees - and investors will be looking for hints to determine the dollar's direction.
Crude oil followed equity markets lower.
"We're seeing more depressing news on jet fuel demand," said Gary Cunningham, director of market research at Tradition Energy in Stamford, Connecticut. "We're looking for a much softer market. The economic picture doesn't look as rosy as it did before."
U.S. crude CLc1 recently fell 4.74% to $39.16 per barrel and Brent LCOc1 was at $41.42, down 4.01% on the day.
Benchmark 10-year notes US10YT=RR last rose 9/32 in price to yield 0.6658%, from 0.694% late on Friday.
Spot gold XAU=dropped 2.4% to $1,902.46 an ounce.
Emerging markets http://tmsnrt.rs/2ihRugV
World stocks vs COVID-19 confirmed caseshttps://tmsnrt.rs/2FMNfYC
(Reporting by Rodrigo Campos; additional reporting by Jessica Resnick-Ault, Chuck Mikolajczak and Sinéad Carew in New York, and Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Dan Grebler)
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