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Asian stock markets: https://tmsnrt.rs/2zpUAr4

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Nikkei dives as markets ponder risk of higher rates

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China shares surge again on stimulus rush

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Fed's Powell to speak ahead of payrolls test

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Oil prices supported by Mideast strife

(Recasts top, adds quote in paragraph 12, updates prices

throughout)

By Nell Mackenzie and Wayne Cole

LONDON/SYDNEY, Sept 30 (Reuters) - World shares ticked

lower on Monday as economic uncertainty fuelled by strife in the

Middle East offset policy measures meant to buoy markets, ahead

of a week packed with data that could determine central banks'

next steps.

Continued Israeli strikes across Lebanon added geopolitical

uncertainty to the mix, though oil prices were still restrained

by the risk of increased supply.

Brent crude oil futures rose 52 cents to $72.50,

while West Texas Intermediate was up 40 cents at $68.58.

While storm Helene had mostly passed, leaving devastation in

many parts of the southern United States, a new tropical

depression headed for landfall was expected to become another

large and powerful hurricane later this week.

Hurricanes that hit the U.S. South and Eastern seaboard

disrupt the supply chain of oil products and stoke supply

concerns from the world's current largest producer of oil.

Meanwhile, in China brokerages were overwhelmed by a

pre-holiday rush of retail clients, jamming up trading systems

as investors rotated money out of bonds and deposits into

stocks.

Government stimulus measures announced last week

continued to boost Chinese stock markets, with the blue-chip

CSI300 closing up 8.5%, its biggest daily gain since

2008 and adding to its 25% run-up in the last five trading

sessions.

The Shanghai Composite climbed 7.1%, on top of last

week's 13% rally. Japan's Nikkei dived, closing down about 5% on

concerns the country's new prime minister favoured normalising

interest rates but might hike taxes on investments and

corporations.

That helped the dollar to hold around 142.44 yen,

after sliding 1.8% on Friday from a 146.49 top.

Frothy markets in Asia offered no succour to Europe, which

opened lower on Monday as investors prepared for a week packed

with economic data.

The STOXX 600 was last down 0.7%, weighed down by

profit warnings and poor growth outlooks from the auto sector.

"The Chinese stimulus has created some noise but the market

may be front-running these first few steps, which might lead to

disappointment later if measures don't continue," said Matt

Tickle, chief investment officer at consultancy Barnett

Waddingham.

Tickle said he'd take little comfort on longer term themes

until he was certain on what would come next, not only from

China's central bank, but from policymakers around the world.

"It's central bank watch, yet again," said Tickle.

The week is packed with major U.S. economic data including a

payrolls report that could decide whether the Federal Reserve

delivers another outsized rate cut in November.

WALL ST ON A ROLL

The rally in China helped MSCI's broadest index of

Asia-Pacific shares outside Japan firm 0.1%,

having surged over 6% last week to a seven-month high.

Wall Street also had a rousing week helped by a benign

reading on core U.S. inflation on Friday that left the door open

to another half-point rate cut from the Fed.

Futures imply around a 55% chance the Fed will ease

by 50 basis points on Nov. 7, though the presidential election

two days earlier remains a major unknown.

A host of Fed speakers will have their say this week, led by

Chair Jerome Powell later on Monday. Also due are data on job

openings and private hiring, along with ISM surveys on

manufacturing and services.

S&P 500 futures dipped 0.1%, while Nasdaq futures

ticked down 0.2%. The S&P 500 index is up 20%

year-to-date and on track for its strongest January-September

performance since 1997.

In currency markets, the dollar index fell 0.2% to 100.22

after easing 0.3% last week. The euro climbed 0.3% to

$1.1200, having bounced on Friday after a benign U.S.

inflation report.

The euro zone releases inflation figures this week, along

with producer prices and unemployment. German inflation and

retail sales are due later on Monday, while European Central

Bank President Christine Lagarde speaks to the European

parliament.

A softer dollar combined with lower bond yields to help gold

reach $2,685 an ounce. It was last at $2,650 an ounce,

and on track for its best quarter since 2016.