GLOBAL MARKETS-Europe down after Russia sanctions, ECB; Wall St fades
* European shares, euro dip to add to recent falls
* Russian troop build-up, sanctions check risk appetite
* Investors seek shelter in safe-haven bonds, gold
* Portugal's woes continue
* Wall Street loses early gains (Adds close of European markets, quote)
NEW YORK, Aug 7 (Reuters) - European shares and the euro fell on Thursday and investors moved to safe-haven government debt after a stronger-than-expected move by Russia to ban certain imports from Europe and the United States.
Early gains on Wall Street faded, with the S&P 500 falling below its 100-day moving average, a significant technical support level. More broadly, MSCI's world equity index lost 0.4 percent.
German government debt yields fell to all-time lows, on increased concern over the effect Ukraine's crisis will have on euro zone growth. The European Central Bank said following its monthly policy-setting meeting that a sanctions war could worsen the growth outlook on the continent, where demand is already weak.
The ECB elected to hold borrowing rates at record low levels on Thursday. Europe's main bourses closed lower, with London's down 0.6 percent, Germany's DAX off 1 percent and France's CAC 40 down 1.4 percent. The move for the DAX put the index down 10 percent from its record closing high in early July.
"Geopolitical risks are heightened, are higher than they were a few months ago. And some of them, like the situation in Ukraine and Russia will have a greater impact on the euro area than they ... have on other parts of the world," said ECB head Mario Draghi, in post-meeting comments.
Russia said on Wednesday it would ban all food imports from the United States and all fruit and vegetables from Europe in a stronger-than-expected answer to Western sanctions for Moscow's support for separatists in Ukraine.
German Bunds slid to a record low of 1.069 percent while the 10-year UK gilts yield touched a one-year low of 2.476 percent.
Gold climbed back above $1,300 an ounce to $1,311.60 and 10-year U.S. bond yields touched near a two-month low at 2.43 percent.
The tensions have, however, aided the ECB's efforts to push down the euro. The shared currency was hovering just above a nine-month low against the dollar at $1.3346.
Portuguese stocks, slumped 2.3 percent, and bonds were again showing significant weakness amid worries the country and its banks will have to pay dearly for the rescue of Banco Espirito Santo.
U.S. stocks succumbed to concerns over Russia after a higher opening as initial enthusiasm from an unexpected drop in jobless claims dissipated.
The Dow Jones industrial average fell 44.44 points or 0.27 percent, to 16,398.9, the S&P 500 lost 5.28 points or 0.27 percent, to 1,914.96 and the Nasdaq Composite dropped 6.24 points or 0.14 percent, to 4,348.81.
"The Russian situation has gone from bad to worse," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.
"It should be abundantly clear that (Russian president Vladimir) Putin is willing to sacrifice the Russian people for his personal gain. Imposing an import restriction on agricultural products will likely lead to rapid inflation."
As fighting has intensified on the ground in eastern Ukraine, NATO said Moscow had massed around 20,000 combat-ready troops on the Ukrainian border and warned of a possible advance.
Russia's dollar-denominated RTS index, which is down nearly 9.3 percent over the past three weeks, lost 0.3 percent while its rouble-based MICEX shed 0.1 percent, giving it a 6.3 percent decline over the same period.
U.S. crude was up 36 cents to $97.28 while Brent broke through the $105 mark, up 74 cents at $105.33 per barrel. (Additional reporting by Rodrigo Campos; Editing by Nick Zieminski)
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