* Asian stock markets : tmsnrt.rs/2C2BSt0
* MSCI Asia ex-Japan down 0.26 percent, Nikkei off 0.58 pct
* Investors wary about escalation in U.S.-China trade war
* Dollar index retreats from two-week highs
By Swati Pandey
SYDNEY, Sept 6 (Reuters) - Global equities remained under pressure with stocks in Asia down for the sixth straight day on Thursday amid fragile investor confidence in the wake of turmoil in emerging markets and anxiety about a major escalation in the U.S.-China trade conflict.
MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.26 percent to hit its lowest since mid-August. Japan’s Nikkei slipped 0.58 percent while Australian shares fell 0.95 percent.
Investors were focussed on the Sino-U.S. trade war with a public consultation period in the United States ending Thursday on additional $200 billion of U.S. tariffs on Chinese goods.
“An escalation of the U.S.-China trade war may be imminent, the timing is somewhat unclear and this justifies caution even given the (U.S. dollar) pullback,” JPMorgan analysts said.
“Conviction and participation will likely remain light until an announcement.”
Measured against a basket of currencies, the dollar index retreated from two-week highs hit earlier this week to be last down 0.2 percent on the day.
Overnight on Wall Street, the S&P 500 lost 0.3 percent and the Nasdaq Composite slipped 1.2 percent. The Dow was a rare bright spot, up 0.1 percent.
Investors are also watching for developments as the United States and Canada resume talks about revamping the North American Free Trade Agreement (NAFTA). Canada insisted there was room to salvage the pact despite few signs a deal was imminent
The dollar, considered a safe haven at times of turmoil because of its status as the world’s reserve currency, has generally benefited from these trade uncertainties. It has gained 8 percent since end-March, with currencies in emerging markets taking a hammering.
The financial crises in Argentina and Turkey have sent shivers in many other emerging markets and in Indonesia the central bank has had to intervene several times in recent weeks to stem the slide in its rupiah currency. The emerging market equity index has been crunched in the past month or so. The index has fallen for five consecutive sessions and is so far down more than 3 percent this week.
An index of emerging market currencies held near 15-month lows after two straight days of heavy declines.
Analysts at Capital Economics believe there was room for further declines in emerging market equities.
A range of factors have hit EM stocks recently, namely policy tightening by the U.S. Federal Reserve, crises in Turkey and Argentina, Sino-U.S. trade war and broader concerns about China’s economy.
“We doubt that the main factors which have caused equities across much of the emerging world to weaken together recently will go away just yet,” Capital Economics said in a note.
Argentina’s peso gained some respite on Wednesday as government officials in Washington sought emergency funding to stem an economic crisis. The cash-strapped nation is asking the International Monetary Fund for early disbursements from a $50 billion standby loan agreed up on in June, which had failed to clear concerns about the country’s ability to pay off its debt
Elsewhere, sterling gained for a second day as investors positioned for a favorable Brexit outcome.
The Australian dollar was a shade firmer at $0.7206 as sentiment was boosted by stronger-than-expected economic growth data on Wednesday.
The currency is however down about 8 percent so far this year as it is used as a liquid proxy for Chinese and emerging market growth.
In commodities, U.S. crude eased 21 cents to $68.51 a barrel while Brent was last down 24 cents at $77.03.
Gold was stronger with spot gold up 0.3 percent at $1,199.63 an ounce.
Editing by Shri Navaratnam