GLOBAL MARKETS-Global stocks fall, U.S. dollar gains after surprise China data

BY Reuters | ECONOMIC | 08/15/22 11:22 AM EDT

* Wall Street indexes trade lower

* China's central bank cuts rates after disappointing data

* Dollar index gains

* Oil prices fall

* Safe-haven gold drops 1%

* Benchmark 10-year yields weaken (New throughout, updates with U.S. markets)

By Chibuike Oguh

New York, Aug 15 (Reuters) - Global equities fell and the U.S. dollar rose on Monday after weaker-than-expected economic data in China prompted the country's central bank to cut its lending rate, raising concerns of a global recession.

The People's Bank of China unexpectedly cut key interest rates on Monday after the world's second-largest economy reported July data on industrial output and retail sales that missed most analyst estimates.

China's strict COVID-19 restrictions have hobbled activity at its main manufacturing hubs and popular tourist spots, including Shanghai, even as a deepening downturn continues in the property market.

"You've been seeing a slowing trend in China amplified by the lockdowns," said Tom Plumb, portfolio manager at Plumb Balanced Fund in Wisconsin.

"The credit problems they've had especially with real estate developers, that's going to tie their hands for how aggressive they can go back to stimulation. But I think it's a sign they're going to try to be more accommodative."

The MSCI world equity index, which tracks shares in 50 countries, was down 0.16%. Overnight in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.34% lower.

The U.S. dollar strengthened following news of the Chinese central bank action amid disappointing data. The dollar index , which measures the greenback against six peers, rose 0.492%, with the euro down 0.64% to $1.0192.

On Wall Street, all major indexes were lower as traders took a pause following four straight weeks of gains and a likely moderation on U.S. Federal Reserve interest rate hikes after a slowdown in inflation. The Dow Jones Industrial Average fell 0.1% to 33,727.66, the S&P 500 lost 0.25% to 4,269.44 and the Nasdaq Composite dropped 0.17% to 13,024.76.

(Reporting by Chibuike Oguh in New York, editing by Deepa Babington)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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