Stocks skid, dollar holds steady as market mood darkens

Stocks skid, dollar holds steady as market mood darkens

* European share benchmark hits four week low

* Fed seen sticking to hawkish tone - analysts

* U.S. peak rate expectations creep higher, dollar gains

* Fresh wobbles hit China property stocks

By Tom Westbrook and Alun John

SINGAPORE/HONG KONG, Aug 24 (Reuters) - Stock markets slid on Wednesday and the dollar held firmly to its recent gains as investor sentiment was hurt by poor economic data from around the world and fading hopes for a less aggressive pace of central bank interest rate hikes.

The pan-European stocks index STOXX 600 .STOXX touched a four-week low and was last down 0.2% while Britain's FTSE .FTSE lost 0.9%, continuing the softness in Asian shares from earlier in the day. .MIAPJ0000PUS .N225

U.S. S&P00 futures ESc1 shed 0.3%.

Wednesday is fairly quiet on the data front, but poor economic activity reports the previous day from the euro zone - which reported a contraction for a second straight month - the United States and Japan, continued to hurt appetite for riskier assets, such as stocks.

Investors' attention is also turning to the central banker's Jackson Hole Symposium which begins on Thursday, with Friday's remarks from Fed chair Jerome Powell a particular focus.

Recent market moves were due to "the combination of the Fed and central banks sticking with their inflation mandate, and at the same time the latest economic indicators showing signs of weakness not just in Europe, but also in the U.S. and also in Japan," said Tai Hui, chief market strategist for Asia at JPMorgan Asset Management.

European benchmark gas prices TRNLTTFMc1 tripling in a little over two months, have not helped either.

"Maybe two or three weeks ago, markets were thinking the Fed may be done with hiking rates by the end of this year and cutting rates in 2023, and that sequence of events now doesn't look like it's happening," Hui said, noting this had pushed the yield on U.S. benchmark 10 year treasuries US10YT=RR back above 3% early in this week.

Traders have been raising their expectations on where the Fed funds rate might peak, with current pricing pointing toward around 3.7% in the middle of 2023. FEDWATCH

The U.S. 10 year yield was last 3.0499% while German 10-year government bond yield DE10YT=RR touched a fresh 8-week high of 1.38%.


The U.S. dollar, which has gained support from higher interest rate expectations, has also benefited from the poor comparative outlook in other parts of the world.

On Wednesday, the euro EUR=EBS was trading at $0.9956 after falling as far as $0.99005 on Tuesday, and was also struggling against sterling at 84.14 pence EUR=GBP , despite the pound's own difficulties.

In China, meanwhile, property stocks fell as earnings brought another reminder of the deep hole that developers are in without access to easy credit. An index of Hong Kong listed builders .HSCIPC fell to a 10-year low.

"People are still trying to understand the full extent of the detrimental effects as it has multiple repercussions," said Samuel Siew, a market specialist at CGS-CIMB in Singapore.

"It's still very hard to actually measure the entire severity of the situation. That is what markets are trying to decipher, and whether ongoing support is sufficient."

Oil recovered from early losses. Brent crude futures LCOc1 rose 0.7% to $100.9 a barrel - still affected by talk of Saudi supply cuts. U.S. crude CLc1 futures gained 1% to $94.75.

Spot gold XAU= held steady at $1,747 an ounce. Bitcoin BTC=BTSP still beared the scars from a sudden slide at the end of last week, parked at $21,300.

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Editing by Ana Nicolaci da Costa, Jamie Freed and Tomasz