* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Shanghai shares skid as Trump targets Huawei
* Asia index ex-Japan hits 15-week trough
* Yen edges higher as mood turns risk averse
* Bitcoin suddenly tumbles, then pares losses
By Wayne Cole
SYDNEY, May 17 (Reuters) - Asian shares suffered a fresh
bout of the shakes on Friday as tough words on trade from
China's media drowned out upbeat news on the U.S. economy and
corporate earnings.
Shanghai stocks led the way into the red amid the growing
fallout from President Donald Trump's move to block China's
Huawei Technologies HWT.UL from buying vital American
technology. The sense of foreboding grew as the Communist Party's
People's Daily used a front page commentary to evoke the
patriotic spirit of past wars, saying the trade war would never
bring China down. "It is hard to get too excited as the news flows in the
trade front points to an escalation rather than an ease in
tensions," said Rodrigo Catril, senior FX strategist at National
Australia Bank.
"Many commentators are suggesting the decision on Huawei and
other Chinese telecos effectively means the President has taken
the 'nuclear option' and it has now moved towards a
'fully-fledged' tech war with China."
Shanghai blue chips .CSI300 fell 2.1%, while the offshore
yuan CNH=D3 eased past 6.9400 per dollar for the first time
since November, 2018.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS lost early gains to fall 0.7%, leaving it at
15-week lows and down 2.6% for the week.
Japan's Nikkei .N225 did manage to bounce 0.9%, while the
main Australian index .AXJO climbed to an 11-year peak as
higher commodity prices boosted miners.
But E-Mini futures for the S&P 500 ESc1 shed 0.36% and
European stock futures STXEc1 FFIc1 FDXc1 pointed to opening
losses.
Sentiment had been briefly soothed overnight by better U.S.
economic news, with U.S. housing starts surprisingly strong and
a welcome pickup in the Philadelphia Federal Reserve's
manufacturing survey. Upbeat results from Walmart WMT.N burnished the outlook
for retail spending, though the giant chain also warned that
tariffs would raise prices for U.S. consumers. As the earnings season winds down, of the 457 S&P 500
companies reporting about 75% have beaten profit expectations,
according to Refinitiv data.
The Dow .DJI ended Thursday with gains of 0.84%, while the
S&P 500 .SPX added 0.89% and the Nasdaq .IXIC 0.97%. .N
POUND GROUND DOWN
The chillier tone in Asia helped Treasuries recoup early
losses as the session wore on, with the 10-year futures contract
TYc1 firming 7 ticks.
The U.S. dollar lost a little of its shine on the safe haven
yen to stand at 109.64 JPY= from a top of 110.03. Against a
basket of currencies, it was a shade softer at 96.824 .DXY .
Yet the euro could make no ground and held at $1.1173
EUR= , down 0.5% for the week so far.
Sterling was one of the worst performers as Britain's Prime
Minister Theresa May battled to keep her Brexit deal, and her
premiership, intact amid growing fears of a disorderly departure
from the European Union. GBP/
The pound touched a three-month low of $1.2783 GBP=D3 and
was down a hefty 1.6% for the week so far.
Also under pressure was the Australian dollar, losing 1.5%
for the week to $0.6890 AUD=D3 as investors piled into bets
that interest rates would be cut in June. The main mover in Asia was cyber currency Bitcoin BTC=BTSP
which tumbled over 20% at one stage for no discernible reason.
It was last down 7%.
In commodity markets, spot gold steadied at $1,287.34 per
ounce XAU= as risk sentiment soured.
Oil futures firmed into a fourth session as rising tensions
in the Middle East stoked fears of potential supply disruptions.
O/R
U.S. crude CLc1 was last up 14 cents at $63.01 a barrel,
while Brent crude LCOc1 futures rose 12 cents to $72.74.
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(Editing by Kim Coghill & Shri Navaratnam)