In This Article:
* MSCI Asia ex-Japan -0.1 pct, Nikkei +0.8 pct
* China shares lead weakness on manufacturing data, trade worries
* Washington could announce plans for tariffs as early as Weds
By Andrew Galbraith
SHANGHAI, Aug 1 (Reuters) - Asian shares gave up ground on Wednesday, with weak data in the region and fears of an imminent escalation in the tariff war between the United States and China pulling markets lower even as strong earnings out of the U.S. provided some support.
Conflicting signs over the state of U.S.-China trade relations pulled markets in opposite directions. A Bloomberg report on Tuesday said that the United States and China were seeking to resume trade talks to defuse a battle over import tariffs.
However, later reports that the U.S. administration plans to propose tariffs of 25 percent instead of the initially proposed 10 percent on $200 billion of imported Chinese goods injected uncertainty back into financial markets.
A source familiar with the plan said the announcement could come as early as Wednesday.
Chinese shares, the offshore yuan and the Australian dollar all weakened.
A source familiar with the Trump administration's tariff plans for China told Reuters that an announcement could come as early as Wednesday.
"We maintain our view that negotiated settlement will be the most likely outcome. However, getting to this stage will still lead to marked volatility in the markets as this process will be protracted, with both sides digging their heels to present a better deal to respective constituents," Everbright Sun Hung Kai analysts said in a note.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1 percent, erasing earlier gains, while Japan's Nikkei stock index gained 0.8 percent. S&P E-mini futures were down less than 0.1 percent at 2,815.75 after earlier edging higher.
Spreadbetters in Europe pointed to more mixed trade in Europe, with London's FTSE set to open 12 points lower, Frankfurt's DAX 1 point higher and Paris' CAC down 8 points.
The Taiwan weighted index rose 0.4 percent, with tech shares getting a boost after Apple Inc. beat Wall Street expectations for its quarterly results thanks to robust sales of its top-of-the-line iPhone X. The company's shares rose 3.4 percent to $196.80 in after-hours trade.
CHINA FALLS
But shares in mainland China dropped, erasing early gains, with trade war fears and a private survey of purchasing managers pointing to a cloudy economic outlook.
The survey showed China's manufacturing sector grew at its slowest pace in eight months in July, dragged down by declining export orders.