August 15, 2014 / 3:40 PM / 3 years ago

GLOBAL MARKETS-Stocks retreat on Ukraine news, bond yields fall

* Report of fresh Ukraine tensions sparks market reversals

* Stocks retreat in Europe, Wall Street

* Bund yields plumb record lows below 1 pct

* Dollar strengthens versus euro (Adds U.S. market open; changes dateline; previous LONDON)

By Herbert Lash

NEW YORK, Aug 15 (Reuters) - Global equity markets retreated on Friday on a report of Ukraine forces engaging a Russian armored column on Ukrainian soil, while yields on benchmark German bunds plumbed record lows below 1 percent on news of the military tensions.

A Ukrainian military spokesman said that Ukraine forces had tracked the armored column after it crossed the border.

The Ukrainian president told British authorities that Ukraine artillery had destroyed part of the armored equipment that crossed the border during the night, according to a presidential website.

“Risk has evaporated from the markets after the Ukraine headlines,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. “We have seen investors use the yen and Swiss franc as safe harbors.”

Yields on German 10-year bunds fell to a record low of 0.962, according to Tradeweb pricings.

Ten-year UK bond yields fell to 2.359 percent, the lowest since August 2013, while U.S. Treasury 10-year yields fell to 2.3221 percent.

MSCI’s all-country world equity index fell 0.2 percent, while the FTSEurofirst 300 index of leading European shares fell 0.45 percent, after trading 0.8 percent higher earlier in the session.

Stocks also retreated on Wall Street.

The Dow Jones industrial average reversed early gains and fell 81.37 points, or 0.49 percent, at 16,632.21. The Standard & Poor’s 500 Index was down 6.60 points, or 0.34 percent, at 1,948.58. The Nasdaq Composite Index was down 9.02 points, or 0.20 percent, at 4,443.99.

The dollar was down 0.1 percent against the yen at 102.37 yen, after hitting its highest in more than a week.

The euro, meanwhile, tumbled versus the Swiss franc to its lowest since January 2013. It was last at 1.2098, down 0.1 percent. The dollar also fell versus the franc to a three-week trough. It last traded at 0.9029 franc, down 0.4 percent.

Crude oil prices rose on the Ukraine news, after Brent had stabilized close to a 13-month low on ample supplies of high-quality oil and signs that faltering global economic growth may cap fuel demand.

October Brent crude rose 95 cents $103.02 a barrel, while U.S. crude rose 93 cents to $96.51 a barrel.

Additional reporting by Nigel Stephenson in London, reporting by Herbert Lash

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