* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* European shares open lower; Asian shares gain
* Japanese yen up 0.5%
* Oil gains
By Ritvik Carvalho
LONDON, Aug 27 (Reuters) - Global shares eked out gains on
Tuesday as some investors held out hopes for a trade deal
between the United States and China, even as the countries
continued to raise tariffs on each other last week.
Shares in Asia gained following a rise in U.S. stocks on
Monday, which came after U.S. President Donald Trump predicted a
trade deal with China. The optimism didn't carry over to Europe
however, with most major country share indices down in early
deals.
Britain's FTSE 100 index .FTSE slipped 0.4% as investors
returned from a bank holiday weekend, and the pan-European STOXX
600 .STOXX was down 0.25% by 0729 GMT. .EU
While Germany's DAX fell 0.3% and France's CAC 40 .FCHI
was down nearly half a percent, the outlier was Italy's FTSE
MIB, which gained 0.04% as the country's ruling 5-Star Movement
and the opposition Democratic Party appeared on the verge of a
deal to form a new Italian government. MSCI'S All Country World Index .MIWD00000PUS , which tracks
shares across 47 countries, was up 0.04% on the day.
Trump said on Monday that Chinese officials had contacted
their U.S. trade counterparts and offered to resume
negotiations, an assertion that China declined to confirm.
His comments helped temper sharp losses in global markets
after both sides announced new tariffs on Friday, in the latest
escalation in the protracted trade dispute.
"Global investors have had their emotions toyed with amidst
the ever-shifting sands of the U.S.-China trade conflict," said
Han Tan, market analyst at FXTM.
"Market nerves have been left raw, with the delicate
sentiment prompting knee-jerk reactions to every nuance
pertaining to the highly unpredictable U.S.-China trade
impasse."
Until there are clear signs of progress in trade
negotiations between the two countries, risk-aversion will
continue to dominate market sentiment, Tan added.
The Japanese yen JPY= , which rallies when markets turn
risk averse, was up half a percent to the dollar. FRX/
Gold, another safe haven, was half a percent higher, and
just off a more than six-year high hit in the previous session.
Earlier in Asia, MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS was up 0.25% after dropping
1.3% the previous day.
Japan's Nikkei .N225 rose 1%.
The Shanghai Composite Index .SSEC rallied 1.35%, with an
additional boost from data showing China's industrial firms
returned to profit in July. South Korea's KOSPI .KS11 added 0.4%.
Markets have been quick to rally on any positive signs
coming out of the trade negotiations between the U.S. and China
this year. However, tariffs have only escalated between the two
countries since 2018, creating uncertainty and denting growth.
"Although the continued resilience of consumers keeps us
confident in the global economic outlook, we do not see this as
the best environment for taking risk on stocks," said Mark
Haefele, chief investment officer at UBS Global Wealth
Management.
"As a result, we make three changes to our tactical asset
allocation. We remove our overweight to global equities versus
high grade bonds and initiate an underweight to emerging market
stocks versus high grade bonds. Separately, we also adjust our
overweight to select higher yielding emerging market
currencies."
The dollar index .DXY versus a basket of six major
currencies stood at 97.875, falling 0.2%.
The euro EUR=EBS was 0.1% higher at $1.1109 after losing
0.4% on Monday.
Oil prices rose. O/R
Brent crude futures LCOc1 were up 0.39% at $58.93 per
barrel after losing 1% the previous day. U.S. crude CLc1 rose
0.48% to $53.97 per barrel.