* Oil prices give up gains, fall 4 percent
* European stocks broadly weaker
* Dollar down 0.3 pct vs euro and 0.4 pct vs yen
* Expectations for monetary stimulus from ECB help sentiment
* Focus turning to Fed meeting on Tue and Wed
By Dhara Ranasinghe
LONDON, Jan 25 (Reuters) - European stock markets fell on
Monday as oil prices reversed earlier gains to tumble 4 percent,
while weak business sentiment numbers from Germany highlighted
growing concerns about the outlook for the global economy.
The pan-European FTSEurofirst 300 index .FTEU3 , which rose
3 percent on Friday to mark its first weekly gain for 2016, fell
0.8 percent in early trade.
Crude oil prices tumbled 4 percent on persistent worries
about oversupply and profit-taking, reversing early gains. That
followed a 10 percent surge on Friday on short-covering and fuel
demand triggered by freezing weather in parts of the northern
hemisphere. O/R
Still, with oil prices holding above $30 a barrel, world
stock markets remained above multi-year lows hit last week.
Risk aversion amid fears of a China-led global economic
slowdown and oil prices sinking to 13-year lows have rocked
global markets this month.
German business morale fell to an 11-month low in January,
a survey showed, suggesting growing concern among company
executives in Europe's largest economy as emerging markets slow
and financial markets get off to a jittery start in 2016.
The Ifo survey reading of 107.3 compared with 108.6 in
December and was well below 108.4 forecast in a Reuters
poll.
Market turbulence sets the backdrop for a meeting of the
U.S. Federal Reserve on Tuesday and Wednesday, while Bank of
Japan policymakers gather on Jan. 28-29.
Last week, the European Central Bank signalled it could
deliver further monetary stimulus, raising hopes that other
central banks might take the same path.
The market rout meanwhile could throw the Fed off its course
of gradual interest rate hikes.
"Attention will now turn to the U.S. Federal Reserve and the
Bank of Japan's latest policy decisions later this week, with
the main focus on the U.S. central bank in the wake of last
month's historic decision to raise rates for the first time in
nine years," said Michael Hewson, chief market analyst at CMC
Markets.
The dip in European equity markets contrasted with Asian
stocks .MIAPJ0000PUS , which rose 1.5 percent and moved further
away from last week's four-year low as oil prices rallied during
the Asian session.
Shanghai stocks .SSEC added 1 percent and Tokyo's Nikkei
.N225 , which slumped to a one-year low last week, rose 1.2
percent.
DOLLAR SLIPS
The dollar slipped 0.4 percent to 118.31 yen JPY= , moving
away from a two-week high touched on Friday at 118.88. The euro
firmed 0.3 percent to $1.0825 EUR= , after losing 0.8 percent
on Friday.
The Australian dollar, sensitive to the ebb and flow in risk
appetite and fluctuations in commodity prices, fell 0.4 percent
to $0.6975 AUD=D4 after touching a nine-day high of $0.7046 on
Friday.
Oil prices meanwhile succumbed to profit-taking after huge
gains on Friday.
Brent LCOc1 fell more than $1 to $30.78 a barrel by 0850
GMT. U.S. crude CLc1 declined $1.45 cents to $30.95 a barrel.
"People are taking profits after a huge increase ... The
other factor would come from still having the market being in a
bearish situation where the market is oversupplied," said Daniel
Ang, an investment analyst at Phillip Futures.
Elsewhere, Greek two-year government bond yields fell 9
basis points to 13.48 percent GR2YT=TWEB and the stock market
rose 1.3 percent .ATG after Standard & Poor's raised Greece's
rating to B- from CCC+ on Friday.
S&P said Greece is broadly in compliance with the terms of
its 86 billion euro financial support program after
recapitalising its banks and taking budgetary steps.