Updates at 0900 GMT

By Iain Withers

LONDON, Oct 3 (Reuters) -Global stocks dipped as European and Asian share indexes broadly retreated on Thursday, while oil prices rose further as markets weighed the risk of a widening Middle East conflict.

Euro zone stocks were last down 0.8% .STOXX, as investors digested weak business activity survey data from the bloc, while MSCI's all-country index also slipped 0.2%. .MIWD00000PUS

Asia-Pacific shares outside Japan .MIAPJ0000PUS had earlier shed 1%, largely driven by Hong Kong stocks .HSI sagging after a sizzling rally, while several markets, including mainland China and South Korea, were closed for the day.

Japan's Nikkei .N225 bucked the trend, up 2% after the country's newly elected prime minister Shigeru Ishiba said it was not the time to raise rates after meeting the central bank governor Kazuo Ueda. Bank of Japan board member Asahi Noguchi later said rates would increase cautiously and slowly.

Nasdaq futures NQc1 dropped 0.5% and S&P futures ESc1 slipped 0.4%.

Geopolitical tensions loomed large, after Israel bombed Beirut early on Thursday, following a year of clashes with Iran-backed Hezbollah.

Oil prices gained on Thursday as concerns grew that the conflict could disrupt crude oil flows from the key exporting region, overshadowing a stronger global supply outlook. O/R

Brent and U.S. crude futures gained around $1 each and were up at $71.11 and $74.83 respectively. LCOc1, CLc1

"Oil's had a good week. But in context, you're looking at kind of low 70s versus summer levels in the 80s. So I don't think there's a signal from the market to say, brace yourself for major escalation... But it's a volatile situation," said Eren Osman, managing director of wealth management at Arbuthnot Latham.

SAFE HAVEN FLOWS MUTED

Safe haven flows in the wider market have so far been muted. Spot gold dipped 0.5% on the day to $2,644.99, but remained near a record high. XAU=

Treasury yields rose on Wednesday after a strong private payrolls report added to evidence of a healthy U.S labour market, lessening the risk of a big downside miss for Friday's non-farm payrolls data.

Two-year Treasury yields US2YT=RR were little changed on Thursday at 3.6539%, while 10-year yields US10YT=RR were at 3.8056%.

Markets imply a 35% chance the Fed will cut interest rates by another 50 basis points in November, compared with almost 60% last week, and have around 70 basis points of easing priced in by year-end. FEDWATCH

In currencies, the euro was broadly flat at $1.1038, and not far from Wednesday's low of $1.10325, a level last seen on Sept. 12, while the US dollar index gained 0.2% to 101.88. =USD

Sterling GBP=D3 fell 1.1% to $1.3115 after Bank of England Governor Andrew Bailey told the Guardian newspaper that the central bank could become a "bit more aggressive" on rate cuts if inflation continued to ease.

Reporting by Iain Withers, Additional reporting by Stella Qiu in Sydney; Editing by Shri Navaratnam, Sam Holmes and Alex Richardson

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