GLOBAL MARKETS-Equities tumble as Nasdaq, Brexit concerns mount; bonds rally

(Updates to midday U.S. trading)

By David Randall

NEW YORK, Sept 8 (Reuters) - Global equity markets and oil prices tumbled on Tuesday as a sharp sell-off in technology stocks and rising concerns over Britain leaving the European Union without a trade agreement threatened to stall a rally that had pushed world shares near record highs despite the coronavirus pandemic.

Fresh tensions between Washington and Beijing after U.S. President Donald Trump again raised the idea of decoupling the U.S. and Chinese economies also came into focus but appeared to have little impact.

"I think the market will shrug this off as electioneering but may find the lining up of technology stock sellers harder to process as the U.S. market returns from a holiday yesterday," said Chris Bailey, European Strategist at Raymond James.

MSCI's gauge of stocks across the globe shed 1.5% following broad declines in Europe and modest gains in Asian markets.

In midday trading on Wall Street, the Dow Jones Industrial Average fell 431.97 points, or 1.54%, to 27,701.34, the S&P 500 lost 66.18 points, or 1.93%, to 3,360.78 and the Nasdaq Composite dropped 309.69 points, or 2.74%, to 11,003.45.

While many market players were unable to pinpoint a single trigger for the Nasdaq's plunge, valuations have been stretched given its 75% gain from a bottom hit in March with big bets on the option market possibly creating extra turbulence.

"Whatever the reason ... tech and growth investors have to decide whether this is a chance to buy on the dips - yet again - or a call to lock in what could be substantial profits," said AJ Bell Investment Director Russ Mould.

In foreign exchange markets, the dollar rose slightly against a basket of currencies at 93.291 and stood up against the euro at $1.1800 with the main focus on Thursday's ECB policy meeting.

Most analysts do not expect a change in the central bank's policy stance but are looking at its inflation forecasts and whether an accommodative tone could help cool down the surge in the bloc's single currency.

"I think the ECB's message will be clearly dovish, given the latest numbers on inflation and the recent rally in the euro," said Pasquale Diana, Senior Macro Economist at investment manager AcomeA SGR.

Investors moved into the perceived safety of U.S. government bonds. Benchmark 10-year notes last rose 13/32 in price to yield 0.6804%, from 0.723% late on Friday.

Concerns also rose about the path of Britain's exit from the EU after the head of the UK government's legal department quit over suggestions that Prime Minister Boris Johnson was threatening to override parts of the Withdrawal Agreement treaty signed in January, increasing the chances of a disorderly Brexit .

Oil fell on worries that a recovery in demand could weaken as coronavirus infections flare up around the world.

U.S. crude recently fell 6.9% to $37.03 per barrel and Brent was at $40.11, down 4.5%.

(Reporting by David Randall Editing by Nick Zieminski and Marguerita Choy)