* MSCI Asia ex-Japan -0.43%, Nikkei down 0.64%
* European shares set to open higher after Monday's falls
* Australian shares -2.2%, biggest daily fall in 2 months
* U.S. tariffs on Brazil and Argentina 'effective
immediately'
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Andrew Galbraith
SHANGHAI, Dec 3 (Reuters) - Asian shares fell on Tuesday
after U.S. President Donald Trump stunned markets by imposing
tariffs on imports from Brazil and Argentina, rekindling fears
over global trade tensions, while weak U.S. factory data added
to the investor gloom.
But European shares, which had also slumped following
Trump's tariff announcement, were expected to rise on Tuesday.
Pan-region Euro Stoxx 50 futures STXEc1 were up 0.41% in
early trades, while German DAX futures FDXc1 added 0.45% and
FTSE futures FFIc1 gained 0.26%.
U.S. S&P 500 e-mini stock futures ESc1 also pointed
higher, rising 0.2% to 3,120.5.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was down 0.43% as Australian shares .AXJO
recorded their worst day in two months with a 2.2% drop.
Japan's Nikkei .N225 shed 0.64%.
But some Asian indexes rebounded in afternoon trade from
session lows.
China's blue-chip CSI300 index .CSI300 fell as much as
0.62% before clawing back to register small gains. The Shanghai
Composite Index .SSEC was down 0.08% after earlier hitting its
lowest point since Aug. 26.
Hong Kong's Hang Seng Index .HSI was 0.24% lower after
earlier falling as much as 1.44%.
In tweets on Monday, Trump said he would impose tariffs on
steel and aluminium imports from Brazil and Argentina, attacking
what he saw as both countries' "massive devaluation of their
currencies." Contrary to his remarks, both Brazil and Argentina have been
trying to strengthen their respective currencies against the
dollar.
Steven Daghlian, market analyst at CommSec in Sydney, said
while the South American tariffs dominated market worries on
Tuesday, China's response to U.S. support for anti-government
protesters in Hong Kong has also chilled sentiment.
"Markets are extremely sensitive to any good or bad news on
the U.S.-China dispute front, but also the U.S. relationship
with other nations as well," he said.
China said on Monday U.S. military ships and aircraft won't
be allowed to visit Hong Kong, and also announced sanctions
against several U.S. non-government organisations for
encouraging protesters to "engage in extremist, violent and
criminal acts." Worsening the mood, data from the Institute for Supply
Management (ISM) showed the U.S. manufacturing sector contracted
for a fourth straight month in November as new orders slid.
That erased cheer markets had drawn from upbeat Chinese
factory surveys released over the past few days. While trade war headlines have been a key driver of markets
in recent weeks, sentiment has broadly held up. The U.S. S&P 500
index .SPX , the Dow Jones Industrial Average .DJI , the
Nasdaq Composite .IXIC and Australia's S&P/ASX 200 index all
touched record highs last week.
On Monday, the Dow Jones index fell 0.68% to 27,861.52, the
S&P 500 lost 0.59% to 3,122.45 and the Nasdaq dropped 0.94% to
8,584.20.
"I think some kind of breathing or consolidation probably is
needed," said Joanne Goh, Asia equity strategist at DBS in
Singapore, noting that some data releases, such as China's
factory surveys, are suggesting a bottoming out.
"I think investors should pick quality stocks not really
affected by the trade war," she said.
BOND TURNAROUND
Bearish sentiment on Tuesday initially pushed U.S. Treasury
prices higher, but yields later rose slightly across the curve,
reflecting the more positive mood in Europe.
Benchmark 10-year Treasury notes US10YT=RR yielded 1.8414%
on Tuesday afternoon in Asia, up from a U.S. close of 1.836% on
Monday. The policy-sensitive two-year yield US2YT=RR , ticked
up to 1.6162% from its U.S. close of 1.614%.
In currency markets, the dollar rose 0.17% against the yen
to 109.16 JPY= and the euro was off 0.05%, buying $1.1072.
The dollar index .DXY , which tracks the greenback against
a basket of six major rivals, was up 0.06% at 97.917.
The Australian dollar AUD=D3 rose to $0.68440 after the
Reserve Bank of Australia kept its cash rate on hold at 0.75%
and stuck with an optimistic outlook for the economy.
Oil prices continued to rise on expectations that the
Organisation of the Petroleum Exporting Countries (OPEC) and its
allies may agree to deepen output cuts at a meeting this week.
Global benchmark Brent crude LCOc1 added 0.26% to $61.08
per barrel, and U.S. West Texas Intermediate crude CLc1 was up
0.38% to $56.17 a barrel.
Gold was lower on the spot market XAU= , shedding 0.1% to
trade at $1,460.87 per ounce. GOL/
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