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GLOBAL MARKETS-Dollar stands alone as rate hikes rattle stocks

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Sterling, euro touch new troughs in early Asia hours

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S&P 500 futures flat after Friday slide

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Gilts count cost of wild week

By Tom Westbrook

SYDNEY, Sept 26 (Reuters) - Asian stocks started the final week of the quarter on the slide on Monday, while the dollar stood ascendant, as the prospect of high interest rates and poor growth shook markets.

S&P 500 futures fell 0.2%. Ahead of the Hong Kong open MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.5% to a two-year low. It is heading for a monthly loss of 10%, the largest since March 2020.

Japan's Nikkei fell 2.0%, South Korea's Kospi hit a two-year low and Australia's ASX 200 fell 1.4% to a three-month low, with global demand fears weighing heavily on mining stocks.

The dollar made new highs on sterling, the euro and the Aussie in thin morning trade.

Last week, stocks and bonds crumbled after the United States and half a dozen other countries raised rates and projected pain ahead. Japan intervened in currency trade to support the yen. Investors lost confidence in Britain's economic management.

The Nasdaq lost more than 5% for the second week running. The S&P 500 fell 4.8%.

"A weekend of reflection hasn't led anybody to change their opinion," said National Australia Bank's head of currency strategy, Ray Attrill in Sydney. "It's a case of shoot first and ask questions later, as far as UK assets are concerned."

Gilts suffered their heaviest selling in three decades on Friday and on Monday the pound made a 37-year low at $1.0765 as investors reckon planned tax cuts will stretch government finances to the limit.

Sterling is down 11% this quarter.

Five-year gilt yields rose 94 basis points last week, by far the biggest weekly jump recorded in Refinitiv data stretching back to the mid 1980s. Treasuries tanked as well last week, with two-year yields up 35 bps to 4.2140% and benchmark 10-year yields up 25 bps to 3.6970%.

The euro wobbled to a two-decade low at $0.9660 as risks rise of war escalating in Ukraine, before steadying at $0.9686.

In Italy, a right-wing alliance led by Giorgia Meloni's Brothers of Italy party was on course for a clear majority in the next parliament, as expected. Some took heart from a middling performance by eurosceptics The League.

"I expect relatively little impact considering that the League, the party with the least pro-European stance, seems to have come out weak," said Giuseppe Sersale, fund manager and strategist at Anthilia in Milan.

Other currencies were nursing losses. The Aussie touched $0.6510, its lowest since mid-2020. The yen hovered at 143.47 with worries over possible further intervention keeping it from losses.

Japan intervened in the foreign exchange market on Thursday to buy yen for the first time since 1998.

Oil and gold steadied after drops against the rising dollar last week. Gold hit a more-than two-year low on Friday and bought $1,643 an ounce on Monday. Brent crude futures rose 71 cents to $86.86 a barrel.

(Additional reporting by Danilo Masoni in Milan; Editing by Sam Holmes)