* MSCI Asia ex-Japan -0.58%, Nikkei down 0.86%
* Australian shares -2%, on track for worst day in 2 months
* U.S. tariffs on Brazil and Argentina 'effective
immediately'
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Andrew Galbraith
SHANGHAI, Dec 3 (Reuters) - Asian shares tumbled on Tuesday
after U.S. President Donald Trump stunned markets with tariffs
against imports from Brazil and Argentina, recharging fears
about global trade tensions, while weak U.S. factory data added
to the investor gloom.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was down 0.37%, with Australian shares dropping
more than 2%, on track for their worst day in two months.
China's blue-chip CSI300 index .CSI300 fell as much as
0.62% before clawing back to end the morning session flat.
Japan's Nikkei .N225 shed 0.61%.
In tweets on Monday, Trump said he would impose tariffs on
steel and aluminium imports from Brazil and Argentina, attacking
what he saw as both countries' "massive devaluation of their
currencies." Contrary to his remarks, both Brazil and Argentina have been
trying to strengthen their respective currencies against the
dollar.
Steven Daghlian, market analyst at CommSec in Sydney, said
while the South American tariffs dominated market worries on
Tuesday, China's response to U.S. supporting for anti-government
protesters in Hong Kong has also chilled sentiment.
"Markets are extremely sensitive to any good or bad news on
the U.S.-China dispute front, but also the U.S. relationship
with other nations as well," he said.
China said on Monday U.S. military ships and aircraft won't
be allowed to visit Hong Kong, and also announced sanctions
against several U.S. non-government organisations for
encouraging protesters to "engage in extremist, violent and
criminal acts." Worsening the mood, data from the Institute for Supply
Management (ISM) showed the U.S. manufacturing sector contracted
for a fourth straight month in November as new orders slid.
That erased the market cheer from upbeat Chinese factory
surveys released over the past few days. While trade war headlines have been a key driver of markets
in recent weeks, sentiment has broadly held up. The U.S. S&P 500
index .SPX , the Dow Jones Industrial Average .DJI , the
Nasdaq Composite .IXIC and Australia's S&P/ASX 200 index all
touched record highs last week.
On Monday, the Dow Jones index fell 0.68% to 27,861.52, the
S&P 500 lost 0.59% to 3,122.45 and the Nasdaq dropped 0.94% to
8,584.20.
"I think some kind of breathing or consolidation probably is
needed," said Joanne Goh, Asia equity strategist at DBS in
Singapore, noting that some data releases, such as China's
factor surveys, are suggesting bottoming out.
"I think investors should pick quality stocks not really
affected by the trade war," she said.
FALLING YIELDS
Bearish sentiment on Tuesday pushed bond prices higher. The
yield on benchmark 10-year Treasury notes US10YT=RR fell to
1.8258% from a U.S. close of 1.836% on Monday, and the
policy-sensitive two-year yield US2YT=RR , dipped to 1.608%
from its U.S. close of 1.614%.
In currency markets, the dollar rose 0.15% against the yen
to 109.15 JPY= and the euro was off 0.05%, buying $1.1072.
The dollar index .DXY , which tracks the greenback against
a basket of six major rivals, was up 0.08% at 97.934 amid the
risk-off mood.
Oil prices continued to rise on expectations that the
Organization of the Petroleum Exporting Countries (OPEC) and its
allies may agree to deepen output cuts at a meeting this week.
Global benchmark Brent crude LCOc1 added 0.33% to $61.12
per barrel, and U.S. West Texas Intermediate crude CLc1 was up
0.39% to $56.18 a barrel.
Gold was a touch lower on the spot market XAU= , shedding
0.02% to trade at $1,462.07 per ounce. GOL/