* Europe, Asia shares fall after China factory data
* European losses pared after German PMI beats forecast
* Dollar, oil, copper dip on China
* Turkish shares, lira rise after AK election win
By Nigel Stephenson
LONDON, Nov 2 (Reuters) - Stocks fell in Europe and Asia on
Monday after further evidence of economic slowdown in China, but
modest growth in German factory activity slightly brightened the
mood.
Turkish markets surged after the Islamist-rooted AK Party
won a clear majority in Sunday's parliamentary election.
Asian shares .MIAPJ0000PUS hit their lowest level in
almost three weeks after two surveys showed Chinese factory
activity slowing.
The private Caixin purchasing manager's index showed
activity declined for an eighth consecutive month. An official
PMI survey on Sunday showed manufacturing unexpectedly
contracted in October for a third straight month.
The figures helped push down the dollar and crude oil and
drove copper to a one-month low.
Chinese shares also fell on concern about the weak economy.
The CSI 300 index .CSI300 of largest listed companies in
Shanghai and Shenzhen closed 1.6 percent lower and the Shanghai
Composite index .SSEC lost 1.7 percent.
"It's been a volatile start to markets in China this morning
following the latest data," said Deutsche Bank (DE:DBKGn) strategist John
Reid.
Worries over global growth, particularly in China, have
rattled financial markets in recent weeks, despite steps by the
Chinese authorities to stimulate the economy.
The prospect of higher U.S. interest rates, after the
Federal Reserve left the door open last week to a first increase
since 2006 in December, has also clouded the outlook.
The pan-European FTSEurofirst stocks index .FTEU3 , which
gained about 8 percent in October for its best month in more
than six years, fell 0.5 percent in early trade. However, losses
were pared after data showed factory activity in Germany and the
euro zone as a whole marginally beat forecasts.
The index was last down 0.2 percent, with Germany's DAX
.GDAXI up 0.2 percent
Turkish stocks .XU100 , which make up less than 5 percent
of MSCI's emerging market index, rose more than 5 percent after
AK's election win.
Turkey's lira currency rose to its highest since
late July and was last up 3.7 percent at 2.807 per dollar.
"The markets have been yearning for a period of political
stability in Turkey for quite some time now. To all intents and
purposes this is the best result that the markets could expect,"
said Nicholas Spiro, managing director of Spiro Sovereign
Strategy.
DRAGHI
The dollar was down 0.1 percent against a basket of its
peers .DXY . The euro EUR= was up 0.2 percent at $1.1021
after comments at the weekend from European Central Bank
President Mario Draghi were seen as not particularly dovish.
Draghi said after the ECB's last policy meeting that the
central bank could introduce new stimulus measures as soon as
December and was considering cutting its deposit rate.
In an interview with the Italian newspaper Il Sole 24 Ore
published on Saturday, he said it was an open question whether
further stimulus was needed.
"The weekend comment from Draghi was a bit more balanced and
neutral than before, which is triggering some short-covering in
the euro," said Yujiro Goto, a currency analyst at Nomura.
The yen JPY= gained 0.1 percent to 120.53 per dollar.
Euro zone bond yields rose. German 10-year yields
DE10YT=TWEB rose 4.4 basis points to 0.57 percent. Italian
IT10YT=TWEB and Spanish ES10YT=TWEB equivalents rose 8.7 and
8.5 bps to 1.57 and 1.77 percent respectively.
Oil prices fell in Asia on the prospect of weak Chinese
demand. Brent crude LCOc1 , the global benchmark, was last down
48 cents a barrel at $49.08.
Copper hit a one-month low of $5,086.50 a tonne
before recovering to $5,126, up 0.3 percent on the day.
Gold XAU= hit a four-week low of $1,134.60 an ounce on
bets the U.S. Federal Reserve would raise interest rates next
month. It last traded at $1,139.25.