GLOBAL MARKETS-Stocks slide in Asia as recession fears pummel sentiment, oil hits 4-yr lows

By Stella Qiu

SYDNEY, April 9 (Reuters) - Stocks in Asia extended a slide on Wall Street on Wednesday as President Donald Trump looked set to press ahead with whopping 104% tariffs on Chinese goods, pummelling oil prices to four-year lows as global recession fears gripped financial markets.

The U.S. dollar fell against safe-haven currencies but the offshore yuan CNH= hit a record low of 7.4287 per dollar overnight. Fed fund futures 0#FF: jumped in early Asian trade to imply around 115 basis points of interest rate cuts this year, compared to 92 basis points early on Tuesday. 0#USDIRPR

Overnight, Washington confirmed 104% duties on imports from China would take effect after midnight on Wednesday.

The shifting headlines on tariffs and the spectre of a prolonged trade war between the world's two biggest economies sparked sharp volatility in financial markets.

The S&P 500 was swept up in one of the biggest reversals in at least the last 50 years, with the benchmark index losing 4.2 percentage points from a positive start to a negative finish. The index has lost $5.8 trillion in stock market value, the deepest four-day loss since it was created in the 1950s. .N

Early in Asia, S&P 500 futures ESc1 fell 1.5% while Nasdaq futures NQc1 dropped 1.7%. The pain likewise spread to Europe, with EUROSTOXX 50 futures STXEc1 down 4.5%, while FTSE futures FFIc1 lost 2.5%.

China's blue chips .CSI300 slipped 1.2% while Hong Kong's Hang Seng index .HSI tumbled 3.1%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 1.7%.

Late on Tuesday, President Donald Trump said China was manipulating currency to protect against tariffs, but he thought China would make a deal at some point.

"U.S. and China are stuck in an unprecedented, and expensive, game of chicken, and it seems that both sides are unwilling to back down," said Ting Lu, chief China economist at Nomura.

"Given the extraordinarily fluid situation, it is impossible to reasonably estimate the impact of the ongoing U.S.-China trade war on China’s economy."

The onshore Chinese yuan was already down at 2023 lows and much attention was on the mid-point fixing from the People's Bank of China on Wednesday, which was set at 7.2066 per dollar, the weakest level since September 2023.

Analysts at JPMorgan believed the rapid escalation with U.S. tariffs on China were disruptive enough to push the global economy into recession.

"Given the import bill from China, the China tariff alone amounts to a whopping $400bn tax hike on U.S. households and businesses," they said in a note to clients. "The currency is likely to be a release valve for China policymakers."

Other stock markets in Asia were also deep in the red. Japan's Nikkei .N225 tumbled 3.5%, after rallying 6% on Wednesday on hopes that Tokyo may get some trade deal with the U.S. Taiwanese stocks .TWII also fell 1.7% even though the government activated a $15 billion stabilisation fund.

In the Treasuries market, longer-dated bond yields jumped in part due to investors selling the safe-haven asset to cover losses elsewhere. Short-end bonds, however, rallied as investors priced in more easing from the Federal Reserve.

The benchmark 10-year yield US10YT=RR rose another 5 basis points to 4.335%, bringing the total rise over the past three days to a whopping 34 bps.

Two-year yields US2YT=RR fell 6 bps to 3.665%.

In currency markets, safe-haven currencies like the yen and Swiss franc found some more love, with the dollar skidding 0.6% to 145.36 yen JPY=EBS and down 0.5% to 0.8430 Swiss franc CHF=.

The kiwi NZD=D3 rose 0.3% to $0.5550 after the Reserve Bank of New Zealand cut interest rates by 25 bps to 3.5%, although it cautioned about downside risks to the local economy from global trade barriers.

Oil prices dived over 4% on Wednesday on concerns about demand from China. Brent futures LCOc1 plunged 3.9% to $60.36 a barrel, while U.S. crude futures CLc1 also tumbled 4.4% to $56.96 per barrel.

Gold struggled to regain its upward momentum and was last down 0.2% at $2,03976 per ounce, about the lowest in a month.

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