By Wayne Cole
SYDNEY (Reuters) - Asian share markets found support on Thursday as a rally in Chinese stocks helped offset the latest escalation in the Sino-U.S. trade war, while Russia's rouble tumbled as the United States slapped fresh sanctions on the country.
Shanghai blue chips climbed 2.7 percent amid talk of possible government support for home-grown technology companies, just the latest in a series of growth boosting measures rolled out by Beijing as the trade dispute worsens.
Hopes for more Chinese infrastructure spending also underpinned industrial resources including iron ore and copper.
The gains in Chinese stocks helped MSCI's broadest index of Asia-Pacific shares outside Japan reverse early losses to nudge up 0.5 percent.
The relief had yet to spread to Europe with financial spreadbetters tipping London's FTSE to open 8 points lower, Frankfurt's DAX 4 points down and Paris' CAC flat.
Japan's Nikkei slipped 0.2 percent, weighed in part by a shock slump in core machinery orders.
Shares in Mazda Motor Corp, Suzuki Motor Corp and Yamaha Motor Co also fell on news they conducted improper fuel economy and emissions tests on their vehicles.
Japan will try to avert steep tariffs on its car exports and fend off U.S. demands for a free trade agreement at talks in Washington later in the session.
Early on Thursday, China's state broadcaster said the country must counteract U.S. tariffs and that Beijing had the confidence to protect its own interests as well as the means to do so.
China had already announced additional tariffs of 25 percent on $16 billion worth of U.S. imports from fuel to autos. The tariffs will apply to billions of dollars in U.S. gasoline, diesel and other oil products, though not crude.
The oil market took the news hard on Wednesday, suffering losses of more than 3 percent. [O/R]
Prices steadied a little on Thursday, with U.S. crude edging up 12 cents to $67.08 per barrel, while Brent bounced 24 cents to $72.52.
MORE SANCTIONS
In currency markets, the Russian rouble sank after Washington said it would impose fresh sanctions because it had determined that Moscow had used a nerve agent against a former Russian agent and his daughter in Britain.
There were also reports of a new U.S. Senate bill that would impose widespread sanctions on Russia for election meddling.
The rouble duly slid to its lowest since late 2016, with the dollar buying 65.74 rubles having jumped 3.3 percent overnight.
The pound skidded to its lowest against the dollar and euro in almost a year as fears grew Britain might leave the EU without a deal on trade with Brussels.
Traders reported a significant increase in investors hedging against a 'no-deal' Brexit, an event which could send sterling into free fall and hurt the economy by raising trade barriers with Britain's biggest export market.
Sterling was last trading at $1.2881, having dropped 0.4 percent overnight.
The Japanese yen seemed to be catching a bid as a traditional safe-haven, with the dollar easing to 110.95 yen after stretching as high as 111.44 on Wednesday.
The euro was relatively steady at $1.1610, while the dollar index was a shade firmer at 95.124.
The New Zealand dollar dropped 1.1 percent to a two-year trough at $0.6665 after the country's central bank pledged to keep rates at record lows well into 2020.
"The risk of rate moves over the next 12 months is weighted more toward cuts than hikes, and financial markets will price the risk accordingly," said Kiwibank chief economist, Jarrod Kerr.
"The good news here is interest rates and exchange rates will remain lower for much longer, assisting growth."