GLOBAL MARKETS-China joins Asian shares in cautious advance ahead of trade talks

* Investors nervous ahead of U.S.-China trade talks
* China shares, yuan up a tad after week-long holiday
* Turkish lira drops to 1-month low on tension over Syria
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Hideyuki Sano
TOKYO, Oct 8 (Reuters) - Asian shares inched up on Tuesday,
with Chinese shares making modest gains after a week-long
holiday, though investors remained cautious over U.S.-China
trade talks after President Donald Trump said a quick trade deal
was unlikely.
Japan's Nikkei .N225 climbed 1.0% while MSCI's broadest
index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose
0.73%, led by gains in tech shares in South Korea and Taiwan.
South Korea's Samsung Electronics 005930.KS rose 1.2%
after its profit guidance. The semiconductor firm said its
third-quarter operating profit likely fell 56% on a downturn in
global memory chip prices, but that was better than what
analysts had anticipated. Taiwan's stock index .TWII gained 0.7% to hit five-month
highs while Hong Kong shares .HSI extended gains after the
territory's leader said she had no plans to use the emergency
regulation ordinance to introduce other laws.
Shanghai shares .SSEC rose 0.3% after the week-long break
though gains were led mainly by defensive shares ahead of the
crucial trade talks.
Spending on retail goods and dining during China's National
Day holidays returned to growth this year, offering unexpected
respite to an economy that has been expanding at its weakest
pace in almost three decades. Still a private survey showed China's services sector grew
at its slowest pace in seven months in September.
On Wall Street, the S&P 500 .SPX lost 0.45% on Monday,
unable to sustain gains made after positive tweets and news
headlines about the trade talks. "Given the importance of the event, markets will be
extremely nervous. I expect things to stay this way for now. On
the whole, markets are not that optimistic about the outlook,"
said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui
Asset Management.
U.S. and Chinese deputy trade negotiators on Monday launched
two days of talks aimed at paving the way later this week for
the first minister-level negotiations in months.
But prospects for progress in U.S.-China trade talks dimmed
after Washington blacklisted Chinese companies over Beijing's
treatment of predominantly Muslim ethnic minorities.
Among those blacklisted, trading in video surveillance
company Hikvision 002415.SZ was suspended while voice
recognition front-runner IFLYTEK Co 002230.SZ fell as much as
3.1%.
Trump also said he hoped China found a humane and peaceful
resolution to the ongoing political protests in Hong Kong, and
warned the situation had the potential to hurt trade talks.
The bilateral talks are getting underway ahead of a
scheduled increase in U.S. tariffs on $250 billion worth of
Chinese goods, to 30% from 25% on Oct. 15.
Trump has said the tariff increase will take effect if no
progress is made in the negotiations.
"This ongoing trade-war discussion is a much more secular
theme rather than something that is going to be resolved in the
next couple of days," said Maurice Meijers, a fixed-income
portfolio manager at Dutch fund manager Robeco in Singapore.
Meijers said he doesn't expect a sudden massive breakthrough
that would give markets reason to rally. "That's very unlikely,
I'll expect this to be an ongoing theme."
In the currency market, the Turkish lira steadied for now
after declining more than 2% on Monday over concerns about
Ankara's planned incursion in northern Syria. Trump threatened to destroy Turkey's economy if Ankara takes
a planned military strike in Syria too far even though the U.S.
leader himself has opened the door for a Turkish incursion.
The lira TRYTOM=D3 traded at 5.837 per dollar, near its
weakest level since Sept. 2.
Major currencies were more range-bound.
The euro stood at $1.0973 EUR= , with its recovery from its
2-1/2-year low of $1.10879 hit a week ago meeting a strong
resistance around $1.10.
The dollar traded at 107.40 yen JPY= , up 0.15% after
having found some support around 106.50 yen in the past few
sessions.
Sterling traded at $1.2290 GBP=D4 , capped by concerns that
sizeable differences between Britain and the European Union
remained for striking a Brexit withdrawal deal.
The yuan gained 0.35% to 7.1269 yuan per dollar CNY=CFXS
after the Chinese central bank set a stronger-than-expected
mid-point.
U.S. debt yields jumped back as $78 billion in note and bond
supply slated for auction this week helped push prices lower
after last week's dramatic rise.
The 10-year U.S. Treasuries yield last stood at 1.575%
US10YT=RR .
Oil prices rose on Tuesday, as unrest in oil-producing
countries Iraq and Ecuador raised concerns of supply disruption.
Brent crude LCOc1 futures rose 0.51% to $58.65 a barrel
while U.S. West Texas Intermediate (WTI) crude CLc1 gained
0.61% to $53.07 per barrel.