GLOBAL MARKETS-Syria doubts drive up oil, yen; stocks slip
* U.S. lays groundwork for possible action against Syrian government
* Yen broadly firmer, Turkish lira hits record low vs USD
* Oil supported by risk to supply disruption
* European equities open lower after sharper falls in Asia
LONDON, Aug 27 (Reuters) - Uncertainty about the possibility of military action against the Syrian government lifted oil towards a five-month high on Tuesday and undercut share prices and spurred demand for safe-haven assets like the yen.
Dealers said the moves, spurred by reports from Washington that a strike may be imminent, were not massive as investors are waiting to see how the situation unfolds.
"Certainly there hasn't been any panic but with the headlines out there, there has been some risk-off trading," said Greg Matwejev, director of FX Hedge Fund Sales and Trading at Newedge.
U.S. Secretary of State John Kerry, in the most forceful reaction yet to the Aug. 21 gas attack outside Damascus, set the stage for possible action when he said President Barack Obama "believes there must be accountability for those who would use the world's most heinous weapons against the world's most vulnerable people."
Kerry said Obama was consulting with allies before he decides on how to respond and those comments saw U.S. stocks end 0.4 percent lower in light volumes on Monday.
The share selloff started the move into safer assets with the yen rising broadly to leave the greenback down 0.4 percent at 98.07 yen and the Australian dollar down 0.8 percent to 88.25 yen.
The euro had fallen 0.3 percent against the Japanese unit though it was steady against the dollar at $1.3372.
Brent crude oil for October was around $111 a barrel, just under Monday's high of $111.68, which was its highest price since April 2.
European shares were down 0.6 pct in early trading following a drop of 1.2 percent across Asian markets outside Japan . Tokyo's Nikkei ended 0.7 percent lower, while the safe-haven yen rose broadly.
Traders in Europe were expecting some good news on the economic front which could ease the nervousness in the market.
While Italy's main share index was in positive territory, rising 0.4 percent after falling about 0.8 percent on Monday on concern over the stability of the ruling coalition, with Silvio Berlusconi's centre-right party threatening to bring down the government.
Emerging markets were still being hit hard by doubts over the Syrian situation, which added to market pressures on near neighbour Turkey and sent the lira slumping to a record low around two to the dollar.
The lira was already under pressure with investors pulling out of emerging markets as investor position for a post-stimulus world with many betting the U.S. Federal Reserve will start reducing its bond-buying programme next month.
In Asia, the Indian rupee and the Malaysian ringgit were notable movers. The rupee hit a record low at 65.71 per dollar, while the ringgit reached a three-year low around 3.3300 per dollar.
"It has been a tough time for many emerging market currencies over recent weeks," said Greg Gibbs, currency strategist at RBS. "The timing of the taper almost appears less relevant now, just the fact that the Fed is thinking it is likely to happen over the next year appears to be enough."
Philippines stocks down 4.3 percent, while Indonesian shares slid 3.1 percent to one-year lows.
Investors also gave commodities a wide berth with copper shedding 0.4 percent to $7,332 a tonne.
Gold slipped to $1,399 an ounce, having reached an 11-week peak above $1,406 on Monday. It has rallied more than $200 since the end of June when prices troughed at three-year lows and traders suspect some profit-taking is in order.