GLOBAL MARKETS-Stocks slide, safe assets gain on anxiety over trade talks

* S&P500 futures down as much as 1.3%
* China's Liu to cut short his visit to Washington - SCMP
* Sterling dogged by Brexit worries, Turkish lira slumps
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Hideyuki Sano
TOKYO, Oct 10 (Reuters) - Global stocks tumbled and the safe
haven yen and Swiss franc gained in early Asian trade on
Thursday, on signs Washington and Beijing were still wide apart
on trade issues and were making no progress in deputy-level
talks.
The South China Morning Post (SCMP) reported the Chinese
delegation, headed by Vice Premier Liu He, was planning to leave
Washington after just a day of minister-level meetings, instead
of as originally planned on Friday. "Barring any surprise today, it looks like their talk is
breaking down. The tariff will be hiked. The situation looks
dire," said Norihiro Fujito, chief investment strategist at
Mitsubishi UFJ Morgan Stanley Securities.
S&P500 mini futures ESc1 slumped as much as 1.3%, though
they pared some losses following a tweet from a CNBC reporter
that the White House said it was not aware of change in Liu's
plans. U.S. stock futures last stood down 0.7%. MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS eased 0.31% while Japan's Nikkei .N225 slip
0.11%.
The SCMP report on the U.S.-China trade talks came less than
a couple of hours after U.S. President Donald Trump told
reporters he thought China wanted to make a trade deal more than
he did. Chinese government officials told Reuters that Beijing has
lowered expectations for significant progress from this week's
trade talks with the United States, upset by the blacklisting of
Chinese companies. Top negotiators from the two countries were scheduled to
meet in Washington on Thursday and Friday to try to end a
bruising 15-month-old trade war.
Without significant progress, Trump is set to hike the
tariff rate on $250 billion worth of Chinese goods to 30% from
25% next Tuesday.
China is unlikely to be willing to make an easy compromise
with a U.S. president who seems increasingly vulnerable to
domestic political pressure as opposition Democrats seek to
impeach him, Mitsubishi's Fujito added.
U.S. Democratic presidential contender Joe Biden called for
the impeachment of Trump for the first time in a deepening
partisan fight over a congressional investigation of the
Republican president. Before the report over stalled trade talks, share prices had
gained on Wednesday, with the S&P 500 .SPX rising 0.91% on
hopes of a possible compromise between the world's two biggest
economies.
In the currency market, the yen advanced up to 0.4% to
107.035 to the dollar JPY= and last stood at 107.33.
The Swiss franc also gained as much as 0.4% to 0.9923 franc
per dollar CHF= .
The Chinese yuan dropped 0.4% in offshore trade to 7.1685
per dollar CNH= , touching its lowest in five weeks before
bouncing to 7.1461.
The euro firmed slightly to $1.0986 EUR= .
Sterling wobbled near one-month lows against the dollar and
the euro as hopes of a break-through on a key sticking point for
a Brexit deal were dashed.
Northern Ireland's Democratic Unionist Party, a coalition
partner in the British government, said it would emphatically
oppose a reported European Union concession on the Irish
backstop under any Brexit deal.
The pound last stood at $1.2212 GBP=D4 , near Tuesday's
five-week low of $1.2196.
The Turkish lira retreated to six-week lows as Turkish
troops, together with their Syrian rebel allies, attacked
Kurdish militia in northeast Syria, opening a fresh chapter in
Syria's eight-year-old civil war.
The lira fell to 5.8777 per dollar TRYTOM=D4 , the lowest
since its flash crash on Aug. 26.
U.S. Treasuries yield slipped back after having risen to
1.594% on Wednesday, pressured partly by this week's heavy bond
supply.
The 10-year U.S. Treasuries yield dropped 3.3 basis points
on Thursday to 1.554% US10YT=RR .
The price of front-end Fed funds rate futures gained,
however, on increasing bets on more rate cuts by the U.S.
Federal Reserve.
The November contract FFX9 is almost fully pricing in a
0.25 percentage point cut on Oct. 30.
Oil prices also slid on the report on U.S.-China talks.
Brent crude LCOc1 futures fell 0.55% to $58.00 a barrel
while U.S. West Texas Intermediate (WTI) crude CLc1 lost 0.48%
to $52.34 per barrel.

(Editing by Shri Navaratnam and Jacqueline Wong)