GLOBAL MARKETS-Shares waver as investors weigh stimulus hopes against Sino-U.S. tensions

* MSCI Asia up slightly in afternoon trade
* European shares seen higher
* Global stimulus seen providing structural support for risk
assets - Saxo
* Investors fear further escalation of U.S.-China tensions
* Trump says other consulate closures possible
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Andrew Galbraith
SHANGHAI, July 23 (Reuters) - Asian shares wavered on
Thursday as investors weighed hopes for more stimulus to support
pandemic-stricken economies against a dramatic rise in tensions
between the United States and China.
European equities were set for gains, with pan-region Euro
Stoxx 50 futures STXEc1 up 0.36%, German DAX futures FDXc1
up 0.27% and FTSE futures FFIc1 up 0.11% in early deals.
S&P mini-futures ESc1 added 0.09%.
Washington's order to Beijing to close its consulate in
Houston, Texas amid accusations of spying had weighed on risk
sentiment earlier in Asia, pulling shares lower.
China said the order was an "unprecedented escalation" by
Washington, and a source said Beijing was considering shutting
the U.S. consulate in Wuhan in retaliation.
U.S. President Donald Trump said that other consulate
closures were "always possible". But by afternoon in Asia, MSCI broadest index of Asian
shares ex-Japan .MIAPJ0000PUS was 0.18% higher as Chinese
shares pared losses. The Shanghai benchmark was off 0.6% after
earlier falling more than 2%.
Australian shares .AXJO regained their footing to rise
0.25% and Hong Kong's Hang Seng index .HSI was 0.43% higher.
Nikkei futures NKc1 eked out a 0.09% gain to 22,805, with
Japanese markets closed for a holiday.
Unprecedented stimulus measures to boost battered economies
would continue to provide structural support for riskier assets,
said Kay Van-Petersen, global macro strategist at Saxo Capital
Markets in Singapore.
"The forces of liquidity are just unparalleled ... we're
seeing what happened post the GFC, but we're seeing it on
steroids," he said.
"It's rare that you see both monetary and fiscal policy
turned on, and then when they are they only turn on for a little
bit."
At the same time, further escalation of Sino-U.S. tensions
was increasingly likely, with a break of the Phase 1 trade deal
between China and the U.S. the biggest near-term risk for
markets, he said.
Investors also will be keeping a close watch on U.S. weekly
jobless claims figures due at 1230 GMT for the latest
indications of how the novel coronavirus pandemic has affected
the American economy. The U.S. recorded more than 1,100 new
coronavirus deaths for a second straight day on Wednesday.
Overnight, the Dow Jones Industrial Average .DJI rose
0.62%, the S&P 500 .SPX gained 0.57% and the Nasdaq Composite
.IXIC added 0.24%. .N
In commodity markets on Thursday, spot gold XAU= fell
0.12% to $1,869.57 per ounce, but remained near a nine-year
peak, with prices up more than 23% on the year. Investors have
flocked to the safe-haven metal as they seek shelter from a
potential reversal in U.S. equities. Gold has been helped by a weak dollar, which remained in the
doldrums near more than four-month lows on Thursday, easing
0.16% to 94.860.
The greenback was little changed against the yen at 107.15
JPY= , while the euro climbed 0.16% to buy $1.1587, near a
21-month top.
Oil prices edged up, with U.S. crude CLc1 adding 4 cents
to $41.94 a barrel and global benchmark Brent crude LCOc1 up 2
cents to $44.31 per barrel.