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GLOBAL MARKETS-Asian stocks lose gains made on shorter China quarantine as recession fears persist

TOKYO, June 29 (Reuters) - Asian stock markets fell on Wednesday, extending Wall Street's overnight losses amid concerns over inflation and the possibility of recession, which also boosted the safe-haven dollar. Japan's Nikkei index fell 0.98%, while MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 1.37%, dragged lower by Australian shares .AXJO, off 0.81%, and Korea's KOSPI .KS11, down 1.54%. Asian shares had ended the Tuesday session on an upward trajectory after China announced an easing of its quarantine requirements for inbound passengers, in what some observers saw as the biggest relaxation so far of its "zero COVID" strategy. But the positive impact had petered out on Wednesday. "Inevitably, markets tend to overreact to these sorts of news," said Carlos Casanova, senior economist at UBP in Hong Kong. "In order for that to be sustainable, we really want to see these measures materialise into actual reopening." Chinese blue chips .CSI300, which hit a four month high the day before, lost 1.16% while the Hong Kong benchmark .HSI fell 1.83%. .SS EUROSTOXX 50 futures STXEc1 were down 0.57% and FTSE futures FFLc1 lost 0.68% before European markets opened. The losses in Asia followed a turbulent day on U.S. markets, with the S&P 500 index down more than 2% after data showed U.S. consumer confidence dropped to a 16-month low in June due to fears high inflation could cause the economy to slow significantly in the second half of the year. "It's all pointing to rising expectations of an economic slowdown, potentially a recession in the US economy, maybe as soon as this year," said Casanova. Renewed worries over the potential for a global recession drove investors into the safe haven dollar, and the dollar index remained firm at 104.5. The euro EUR= dropped 0.6% on the greenback overnight, and was little changed in Asia at $1.0506. The Japanese yen JPY= stood at 136.03 per dollar, not far off last week's 24-year low of 136.7. The yen has struggled as the Bank of Japan keeps monetary policy loose even as other major banks tighten, a point reiterated by BOJ governor Haruhiko Kuroda on Wednesday. The yield on 10-year U.S. Treasury notes US10YT=RR fell seven basis points to 3.134%. Oil prices fell back slightly after three sessions of gains, but global supply tightness limited the losses. An overnight report suggested that Saudi Arabia and the United Arab Emirates are unable to raise output significantly in the near future. Brent crude futures LCOc1 fell 0.86% on the day to $116.96 a barrel. U.S. crude CLc1 was down 0.72% to $110.94. Spot gold XAU= was flat, gaining 0.07% to trade at $1,820.7600 an ounce. World FX rates YTDhttp://tmsnrt.rs/2egbfVh Asian stock marketshttps://tmsnrt.rs/2zpUAr4 (Reporting by Sam Byford in Tokyo; Editing by Simon Cameron-Moore) ((Sam.Byford@thomsonreuters.com;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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