GLOBAL MARKETS-Asia stocks flat, euro holds firm after fragmented Europe vote

* Pro-Europe vote limits nationalist gains in EU election
* Volumes thin with UK, US markets closed for market
holidays
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Tomo Uetake and Shinichi Saoshiro
TOKYO, May 27 (Reuters) - Asia stocks hovered near
four-month lows on Monday amid concerns about U.S.-China
tensions while the euro was confined to a narrow range after the
weekend's European Parliament elections.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was virtually flat, a sliver above from a
four-month low touched on Friday, with market holidays in the
U.S. and U.K. denting trading volumes.
Casting a shadow over many share markets were worries the
China-U.S. trade conflict was turning into a technology cold war
between the world's two largest economies.
Japan's Nikkei average .N225 was up 0.3% by its midday
break.
Chinese shares began Monday higher but then slipped, with
the benchmark Shanghai Composite .SSEC down 0.3% and the
blue-chip CSI 300 .CSI300 falling 0.6%. Hong Kong's Hang Seng
.HSI dropped 0.5%.
Wall Street's major indexes edged higher on Friday in a
rebound from the previous session's losses after comments from
U.S. President Donald Trump on trade relations with China
provided markets a bit of a respite. .N
The euro EUR= was a shade higher at $1.1211, holding
within a tight $1.2272-$1.2754 range in what was a limited
reaction so far to partial returns in the European parliament
elections.
Analysts said the single currency's muted reaction came as
the results showed populist and far-right parties in some
countries were unlikely to have gathered as much support as
anticipated.
Parties committed to strengthening the European Union held
on to two-thirds of seats in the EU parliament, official
projections from the bloc's elections showed on Sunday, though
far-right and nationalist opponents saw strong gains.
Macron's Renaissance, built on the ruins of centre-left and
centre-right parties, added to gains for liberals at the EU
level as turnout bounced sharply across the bloc. Along with a
surge for the Greens, that meant four groups occupying the
pro-EU middle ground lost under 20 seats, securing 505 seats out
of 751.
"With a turnout of more than 50%, European elections were
far less of a non-event than usual," Robert Carnell, ING
Asia-Pacific research head, said in a note to clients.
"This was not a ringing endorsement for Euroscepticism -
with only 22% of the seats going to EU sceptical parties, and
even this bolstered by what may be a temporary surge in the UK's
Brexit party seats, the EU parliament remains a largely
pro-European institution."
A centrist, pro-EU coalition would still be possible in the
new chamber that will sit for the first time on July 2. But it
would be more difficult to piece together among more numerous
partners, according to the European Parliament's estimates.
The longer-term impact of the election, therefore, remained
unclear, analysts say.
"It's difficult to foresee what will happen to Brexit, the
political situation in Italy and elections in Greece just by
looking at the vote count," said Shin Kadota, senior strategist
at Barclays in Tokyo.
"We may not see an immediate market reaction, as the
election outcome will have to seep in first before beginning to
have a political impact on the various countries."
The pound was 0.2% higher at $1.2731 GBP=D4 . Sterling had
bounced back from a near five-month trough of $1.2605 after
British Prime Minister Theresa May said she would quit. GBP/
The dollar index against a basket of six major currencies
.DXY inched down 0.1% to 97.565.
The greenback was holding at 109.45 yen JPY= , 0.1 percent
lower on the day.
Oil prices were mixed on Monday as supply cuts led by
producer club OPEC kept markets relatively tight, but Brent
remained below $70 per barrel on concerns over the U.S.-China
trade war. O/R
Front-month Brent crude futures LCOc1 , the international
benchmark for oil prices, rose 0.2% to $68.79 per barrel while
U.S. West Texas Intermediate (WTI) crude futures CLc1
retreated 0.1% to $58.55 per barrel.