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GLOBAL MARKETS-Stocks slump, yen rises as U.S. raises stakes in trade conflict

Published 2018-07-10, 10:03 p/m
GLOBAL MARKETS-Stocks slump, yen rises as U.S. raises stakes in trade conflict
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* MSCI Asia-Pacific index down 1.5 pct, Nikkei sheds 1.8 pct

* Equities slide as U.S. warns of more tariffs on Chinese goods

* News seen reviving trade woes, safe-havens gain broadly

* Copper slides to 1-year low, oil also sharply lower

By Shinichi Saoshiro

TOKYO, July 11 (Reuters) - U.S. tariffs on an additional $200 billion worth of Chinese goods sent Asian stocks tumbling on Wednesday, with China's markets leading the declines, as trade tensions between the world's two biggest economies continued to deteriorate.

Washington decided to impose the extra tariffs after efforts to negotiate a solution to the dispute failed to reach an agreement, senior administration officials said on Tuesday. United States had just imposed tariffs on $34 billion worth of Chinese goods on Friday, drawing immediate retaliatory duties from Beijing on U.S. imports in the first shots of a heated trade war. U.S. President Donald Trump had warned then that his country may ultimately impose tariffs on more than $500 billion worth of Chinese imports.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 1.5 percent. The index had gained for the past two sessions, having enjoyed a lull from the trade war fears that lashed global markets last week.

Hong Kong's Hang Seng .HSI slid 2.2 percent and the Shanghai Composite Index .SSEC slumped 2.4 percent.

S&P 500 and Dow futures were down 0.9 percent ESc1 and 1 percent YMc1 , respectively, pointing to a lower open for Wall Street later in the day.

South Korea's KOSPI .KS11 lost 1.3 percent and Japan's Nikkei fell 1.8 percent .N225 .

"The markets still remain sensitive to the trade-related theme, which is something investors have to take into account for the long term," said Yoshinori Shigemi, global market strategist at JPMorgan (NYSE:JPM) Asset Management in Tokyo.

"At the same time, the trade dispute can easily be blamed for a variety of ills. But it could mask over factors that could also weigh on equities in the longer run, such as tighter monetary policies led by the United States."

The yen, often sought in times of political tensions and market turmoil, gained against a number of peers.

The dollar was down 0.1 percent at 110.88 yen JPY= , pulled back from a near two-month peak of 111.355.

The euro fell 0.25 percent to 130.11 yen EURJPY= and the Australian dollar lost 0.7 percent to 82.24 yen AUDJPY= .

The Aussie, considered a liquid proxy for China-related trades, fell 0.5 percent against the dollar to $0.7422 AUD=D4 .

China's yuan lost more than 0.5 percent against the dollar CNH=D3 and back towards an 11-month low plumbed last week.

The 10-year Treasury note yield US10YT=RR fell nearly 4 basis points to 2.8363 percent, pulling back sharply from a one-week peak of 2.875 percent scaled the previous day.

Oil prices fell after the United States said it would consider requests from some countries to be exempted from sanctions it will put into effect in November that prevents Iran from exporting oil. O/R crude futures LCOc1 lost 1.25 percent to $77.92 a barrel. Oil had risen the previous day, supported by a larger-than expected U.S. stock draw and supply concerns in Norway and Libya.

Copper on the London Metal Exchange CMCU3 sank roughly 3 percent to brush $6,092.50 per tonne, lowest since July 2017.

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