* European stocks down almost 1 percent
* China property stocks down 2 pct; selling pressure in financials
* Dollar sees modest fall, subdued before Yellen
* Oil on defensive on renewed oversupply woes
* Wall Street to open lower, durable goods, jobless data ahead
By Marc Jones
LONDON, Aug 25 (Reuters) - European stocks saw their biggest fall in three weeks on Thursday and currency markets were noticeably subdued as investors took to sidelines ahead of one of the big global central banker gatherings of the year.
Japanese and Chinese stocks had suffered modest drops in Asia and the pace picked up in Europe as London's FTSE .FTSE sank 0.4 percent and Frankfurt .GDAXI and Paris .FCHI lost as much as 1.2 percent in a region-wide slide. .EU
Wall Street was also set for an all-red start for its main S&P 500 ESc1 , Dow 1YMc1 and Nasdaq NQc1 indexes where weekly jobless claims, big ticket goods and Markit PMI data is on the slate. .N ECONG7
Stubbornly low oil prices and warnings about steel demand kept the pressure on miners in Europe, though it was a near 2 percent drop from pharma stocks that caused the most pain after U.S. presidential candidate Hilary Clinton had chastised industry price hikes on social media. wobbles saw some demand for bonds return. Treasury yields dipped to 1.55 percent ahead of U.S. trading though Europe struggled to hold on to its early progress that had been helped by a deal to recapitalise ailing state-owned Portuguese bank Caixa Geral de Depositos. recapitalisation of CGD is likely to have implications for Portugal's budget, but all in all it is positive," said DZ Bank strategist Daniel Lenz. "It's better to have a stable banking sector."
Currency markets, meanwhile, were firmly focused on the annual central banker mountain getaway in Jackson Hole in Wyoming that starts later and will see Federal Reserve chief Janet Yellen speak on Friday. dollar, which is looking for any signal on whether U.S. interest rates will rise this year, drifted down to $1.1283 to the euro EUR= and was flat on the yen at 100.40 yen JPY= .
"There is basically just a bit of risk aversion ahead of Jackson Hole," said CMC Markets senior analyst Michael Hewson. "I think expectations are way too high, though, I don't think Yellen sets as much importance on Jackson Hole as Ben Bernanke did."
On the data front, there was downbeat news from Europe's biggest economy Germany. The closely-followed Ifo survey showed an unexpected deterioration in business morale as the institute also warned that Brexit uncertainty was taking its toll. confidence in Germany has clearly worsened," Ifo head Clemens Fuest said in a statement. "The German economy has fallen into a summer slump."
HOT PROPERTY
In commodities, oil prices remained under pressure after sliding sharply on Wednesday.
U.S. crude CLc1 was down at $46.57 a barrel following a roughly 3 percent drop overnight after an unexpectedly large inventory build in the world's biggest oil consumer renewed worries about oversupply. Brent was back below $49 O/R .
Metalheads had copper near a two-month low, also on evidence of mounting supply, while nickel weakened as date revealed lower shipments to China. MET/L the closure of eight small-scale producers so far, we could see imports stabilise, belying any concerns of supply constriction from the Philippines that has recently riled markets artificially boosting nickel prices," Citi said in a note.
In Asian equities, Japan's Nikkei .N225 ended down 0.3 percent overnight following on from Wednesday's modest losses on Wall Street.
Chinese stocks .SSEC .SZSC fell 1 percent to extend their slide this week as investors took profit on recent red hot property shares which dropped 2 percent. Banks stumbled too ahead of earnings and a crackdown on some lending practices.
"The whole (property) sector had surged more than 20 percent at one point this month, and falls in share prices this morning were purely a result of investors' trading strategy as they want to lock in profits," said Joe Qiao, a Shanghai-based analyst at Xiangcai Securities.
Elsewhere in emerging markets, South Africa's rand ZAR= remained in the spotlight after a 2-day, 5 percent tumbled trigged by police calling Finance Minister Pravin Gordhan to discuss a suspected rogue spy unit in the tax service.
It is seen as part of a power struggle between South African President Jacob Zuma and Pravin whose efforts at the treasury are seen as key to preserving South Africa's investment grade credit rating.
Zuma said on Wednesday he had confidence in Pravin but that he did not have the power to halt the police's investigations.