GLOBAL MARKETS-Shares fall as Sino-U.S. tensions eclipse China GDP growth

* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Bullish China GDP fails to inspire equities
* Geopolitical risk hampers markets
* Oil down as OPEC curbs output cuts

By Stanley White
TOKYO July 16 (Reuters) - Asian shares and U.S. stock
futures fell on Thursday, weighed down by concern about
deteriorating U.S.-China relations and the economic cost of a
resurgence in coronavirus infections that is prompting some
governments to reimpose containment measures.
Even news that China's economy rebounded more than expected
in the second quarter from a record contraction was
not enough to pull regional equities out of the red.
European markets looked set to follow Asia lower, with Euro
Stoxx 50 futures STXEc1 falling 0.83%, German DAX futures
FDXc1 down 0.73%, and FTSE futures FFIc1 off 0.53%.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS slid by 1.18%, while Tokyo's Nikkei .N225 fell
0.74%. U.S. S&P 500 e-mini stock futures ESc1 declined by
0.43%.
Shares in China .CSI300 fell 1.59% and Australian stocks
.AXJO shed 0.9% after the country's jobless rate jumped to the
highest since the late 1990s. Shares in Hong Kong .HSI and
Seoul .KS11 also fell.
Oil futures also declined after OPEC and its allies agreed
to scale back output cuts, renewing concerns over excess supply.
Risk appetite took a hit due to worries about a wide-ranging
dispute between the United States and China over the control of
advanced technologies and the protection of civil liberties in
Hong Kong.
A second wave of coronavirus infections is also triggering a
return to restrictions on business and personal activity that
threaten to impede economic recoveries.
"The upside in financial markets is limited by the visible
increase in coronavirus infections and tension between the
world's two economic giants," said Masayuki Kichikawa, chief
macro strategist at Sumitomo Mitsui Asset Management Co.
"However, the downside is limited due to very low interest
rates and a brighter outlook for China's economy."
China's economy expanded by a better-than-expected 3.2% in
the second quarter from a year earlier, returning to growth as
lockdown measures ended and policymakers stepped up stimulus.
But its recovery is still uneven. Separate data showed
China's industrial output beat expectations in June, but retail
sales unexpectedly fell again, suggesting consumer demand
remains weak. U.S. Secretary of State Mike Pompeo on Wednesday said the
United States would impose visa restrictions on Chinese firms
like Huawei Technologies Co Ltd HWT.UL that he accused of
facilitating human-rights violations. President Donald Trump's administration is also expected to
take action in coming weeks to address perceived security risks
posed by TikTok and WeChat, two popular Chinese mobile apps, a
White House official said on Wednesday. The moves would be the latest salvo in a dispute between
Washington and Beijing that has unsettled markets.
Investors are also worried about jumps in coronavirus cases
in the United States, Australia, and Japan.
On Wall Street the S&P 500 .SPX gained 0.91% on Wednesday,
boosted by hopes for a vaccine and a strong quarterly report
from Goldman Sachs GS.N , but those gains failed to lift Asian
stocks.
U.S. crude CLc1 fell 0.78% to $40.88 a barrel. Brent crude
LCOc1 fell 0.62% to $43.52 per barrel following plans from
OPEC and its allies to ease supply curbs. In the currency market the Australian dollar AUD=D3 , the
New Zealand dollar NZD=D3 , and the Chinese yuan CNY=CFXS all
fell against the U.S. dollar amid rising risk aversion.

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(Editing by Kim Coghill)