* MSCI Asia-Pacific index down 0.1 pct, Nikkei sheds 0.8 pct
* Dollar sags as US yields decline amid risk aversion
* Crude oil prices edge up after falling sharply overnight
By Shinichi Saoshiro
TOKYO, June 26 (Reuters) - Global stocks extended a sell-off on Tuesday as mounting trade tensions between the United States and other major economies continued to steer investors away from riskier assets, lifting safe-haven U.S. Treasuries and keeping the dollar on the defensive.
Equities in Asia took their cues from Wall Street, where the S&P 500 and Nasdaq suffered their steepest losses in more than two months overnight.
U.S. technology shares were particularly hard hit. Chipmakers which derive much of their revenue from China took a battering, following a report on Monday that the U.S. Treasury Department was drafting curbs that would block companies with at least 25 percent Chinese ownership from buying U.S. tech firms.
Besides the trade spat with China, the United States has recently upped the ante in a challenge to the European Union by threatening to impose tariffs on cars imported from the bloc.
MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.1 percent.
Japan’s Nikkei lost 0.8 percent, South Korea’s KOSPI fell 0.55 percent and Australian stocks dropped 0.6 percent.
“Increasingly hawkish trade rhetoric the United States is employing could begin impacting the economy by cooling investor sentiment and curbing capital expenditure by corporations,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
“It’s turning out to be a long-term bearish factor for the financial markets, as the United States is unlikely to back down at least through its midterm elections.”
The dollar index against a basket of six major currencies stood little changed at 94.302 after dipping 0.25 percent overnight, when it fell for the fourth straight session.
The greenback was pressured as long-term U.S. Treasury yields declined to one-week lows amid the heightened risk aversion in financial markets.
The euro hovered just below an 11-day high of $1.1713 scaled overnight against the sagging dollar.
The U.S. currency was down 0.2 percent at 109.525 yen , having fallen to a two-week low of 109.365 on Monday. The yen often attracts bids in times of political tensions and market turmoil.
Brent crude oil futures were up 0.3 percent at $74.95. The contracts had slid 1 percent overnight as receding investor risk appetite weighed on commodities.
Oil prices have seesawed after OPEC and its allies on Friday agreed to increase global supplies, albeit modestly. (Reporting by Shinichi Saoshiro Editing by Shri Navaratnam)