* Dollar index hits 13-month high, commodities tumble
* Turkish lira extends bounce but many early gains fizzle
* Stronger dollar pressures commodities, copper, gold, oil slide
* World stock index down 1.3 pct, EM stocks slump 2 percent
By Sinéad Carew
NEW YORK, Aug 15 (Reuters) - Equities around the world took a dive on Wednesday, with emerging market stocks set to confirm a bear market and the dollar hitting a 13-month high, while weakness in China's yuan rattled investors' nerves.
The stronger dollar also put commodities under pressure across the board, with copper hitting a 12-month low and gold at an 18-month low. Oil futures also lost ground.
While fears of a crisis in Turkey still loomed, China was in sharp focus as the yuan CNH=EBS sagged nearly 0.8 percent to 6.9467 per dollar, hitting its weakest level since January 2017 following disappointing economic data earlier this week. L5N1V645W
The data stoked speculation whether the People's Bank of China would intervene with more fiscal stimulus to stem its currency from breaking through the 7-yuan mark. investors are waking up to the idea that the situation in China may be pretty impactful as far as global markets go," said Emily Roland, head of capital markets research at John Hancock Investments.
"With China being the engine of global economic growth, if you start to see their currency weaken significantly because of the slowdown we're seeing there and you start to see the dollar meaningfully increase, there could become a point where there's a liquidity issue globally," Roland added.
Turkey's lira eked out a second day of gains as authorities tightened the screws on foreign investors aiming to short the currency But the country's failure to tackle galloping inflation kept investors fearful that Turkey was headed for full-blown crisis and debt defaults.
Investors stepped up safe-haven holdings of the U.S. dollar due to worries about China and Europe's exposure to Turkey, which pushed the euro to its weakest level in over a year.
The dollar index .DXY was flat, with the euro EUR= down 0.01 percent to $1.1341.
The S&P 1500 Metals & Mining index .SPCOMMTM was down 4.6 percent, on track for its biggest one-day drop since March, after hitting its lowest point since late November earlier in the day.
Spot gold XAU= dropped 1.3 percent to $1,177.84 an ounce. metal prices also tumbled, with benchmark copper CMCU3 hitting a 15-month low of $5,773 a tonne on the London Metal Exchange and zinc CMZN3 touching $2,291, a level last seen in October 2016. Lead CMPB3 dropped as low as $1,919.50, its lowest since September 2016 and the metal's biggest daily loss in nearly seven years. emerging equities index .MSCIEF was last down 1.9 percent after having fallen more than 20 percent from its January intraday high earlier in the day. Latin American currencies also slid. Dow Jones Industrial Average .DJI fell 279.22 points, or 1.1 percent, to 25,020.7, the S&P 500 .SPX lost 31.98 points, or 1.13 percent, to 2,807.98 and the Nasdaq Composite .IXIC dropped 124.91 points, or 1.59 percent, to 7,745.99.
The pan-European FTSEurofirst 300 index .FTEU3 lost 1.41 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 1.27 percent.
The CBOE Volatility Index .VIX , Wall Street's so-called "fear gauge," jumped to a more than six-week high of 16.86, showing rising demand for protection against a near-term drop in U.S. stocks. The index was last up 2.97 points at 16.28.
Benchmark 10-year U.S. Treasury notes US10YT=RR last rose 12/32 in price to yield 2.8533 percent, from 2.895 percent late on Tuesday.
The backdrop to all this is the escalation in global trade tensions, with Beijing lodging a complaint to the World Trade Organization to determine the legality of U.S. tariff and subsidy policies. has also raised tariffs on some U.S. products "in response to the U.S. administration's deliberate attacks on our economy", Vice President Fuat Oktay wrote on Twitter. crude oil CLcv1 fell 2.95 percent to $65.06 per barrel and Brent LCOcv1 was last at $70.83, down 1.95 percent on the day after data showed U.S. crude stockpiles jumped last week, compounding worries about a weaker global economic growth outlook. Dollar, U.S. Treasuries benefit from safe haven flows
https://reut.rs/2P84bbH Turkey's ripple effect on global assets, so far
https://reut.rs/2KTqwGI S&P 500 'skew' index
https://reut.rs/2PcpiJZ
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