GLOBAL MARKETS-Stocks fall as Ukraine tensions, China data sour sentiment

Mon May 5, 2014 10:40am EDT

* Gold hits three-week high as Ukraine tensions simmer

* Oil slips below $108 a barrel on Chinese manufacturing data

* Yen at two-week high vs dollar on soft China data (Adds opening of U.S. markets, changes byline, dateline; previous LONDON)

By Herbert Lash

NEW YORK, May 5 (Reuters) - Global equity markets fell on Monday after data showing contraction in Chinese manufacturing renewed concerns about the strength of the world's second-largest economy, while tensions over Ukraine underpinned safe-haven gold.

Shares opened lower on Wall Street, following declines across European equity markets, as Ukraine's interior minister drafted a new special forces unit into Odessa and fighting continued near the eastern town of Slaviansk.

The violence in Odessa, a southwestern port with a broad ethnic mix from Russians and Ukrainians to Georgians and Tatars, was seen as a turning point in Kiev, encroaching for the first time into an area beyond the Russian-speaking east.

"The path of least resistance on the stock market appears to be down, especially with the escalation in Ukraine," said Luc Bocahut, portfolio manager at Monaco-based Tiverton Trading.

MSCI's all-country world stock index fell 0.19 percent, while the euro zone's blue-chip Euro STOXX 50 index was down 0.58 percent.

On Wall Street, the Dow Jones industrial average fell 87.67 points, or 0.53 percent, to 16,425.22. The S&P 500 lost 7.14 points, or 0.38 percent, to 1,874 and the Nasdaq Composite dropped 10.885 points, or 0.26 percent, to 4,113.013.

Gold prices hit three-week highs in thin trade, extending the previous session's gains, as simmering tensions in Ukraine.

U.S. gold futures for June delivery were up $8.50 an ounce at $1,311.40.

A loss of momentum in China's economy also weighed on stocks and crude oil prices as activity in China's manufacturing sector contracted for a fourth consecutive month in April, a private survey showed on Monday.

HSBC/Markit purchasing managers' index for April came in at 48.1, lower than a preliminary reading of 48.3, but up slightly from an eight-month low of 48.0 in March.

Oil slipped below $108 a barrel.

Brent crude for June delivery fell $1.10 to $107.49 a barrel. U.S. crude was down 28 cents at $99.48 a barrel.

The yen rose to a two-week high against the dollar on the Chinese data, bolstering the safe-haven Japanese currency.

The greenback fell as low as 101.84 yen, its weakest since April 17 and down more than 1 yen from Friday's near one-month high of 103.025 yen on trading platform EBS. It was last trading at 102.07, down 0.1 percent on the day.

The dollar index was down 0.03 percent, while the euro was 0.04 percent higher against the dollar.

U.S. government bond prices fell, with the 10-year note down 2/32 to yield 2.6023 percent. (Reporting by Herbert Lash; Additional reporting by Catherine Evans in London; Editing by James Dalgleish)