* MSCI Asia Ex-Japan +0.1 pct
* Nikkei ends flat as Abe wins LDP leadership vote
* European shares seen slightly higher
* Trade war seen slowing U.S. growth to 2 pct in 2019 -poll
By Andrew Galbraith
SHANGHAI, Sept 20 (Reuters) - Asian stocks edged higher on Thursday and European markets looked set to follow as investors bet that robust U.S. economic growth will offset the drag from the Sino-U.S. trade war for a while longer.
After a knee-jerk reaction to new tit-for-tat tariffs announced by Washington and Beijing on Tuesday, markets now appear to be taking a somewhat longer view, reckoning the fallout will take some time to show up in corporate earnings and not produce a sharp global shock.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1 percent, while Japan’s Nikkei stock index ended flat. Shares in China and Hong Kong dipped.
In Europe, spreadbetters expected London’s FTSE to open 0.1 percent higher at 7,338, Frankfurt’s DAX to open 0.07 percent higher at 12,227 and Paris’ CAC to open 0.07 percent higher at 5,398.
Markets were closely watching a European Union summit where Prime Minister Theresa May appealed to fellow EU leaders on Wednesday to drop “unacceptable” Brexit demands that she said could rip Britain apart.
Rob Carnell, chief economist and head of research, Asia-Pacific at ING, said he saw more reasons to take a “glass-is-half-full” approach given the recent selloff in emerging markets.
“It’s not my natural state of being at all, but I’m always looking for the bad in things, and there’s plenty out there, and the markets don’t really seem to be responding all that much,” Carnell said.
U.S. shares had been boosted on Wednesday by expectations that the impact of the Sino-U.S. trade war would be smaller than feared, with U.S. tax and other fiscal policy measures potentially outweighing any negative impact.
On Thursday, S&P 500 E-mini futures were slightly lower at 2,909.5.
The broader market sentiment was at odds with a new Reuters poll that showed unanimous agreement that an escalating trade war with China was bad economic policy for the United States and could cause economic growth to slow.
The consensus of the poll for U.S. growth showed a slowdown to 2.0 percent in the final quarter of 2019, less than half the last reported rate of 4.2 percent.
Analysts at Citi also cautioned in a note Thursday that U.S. housing data out this week showed signs of weakness despite a headline jump.
Citi said housing starts had been strong, but building permits - a indicator of future activity - were at their lowest since May 2017.
“The housing market remains a specific point of weakness in the U.S. economy and while not in focus, it could be important... housing data on Tuesday wasn’t encouraging on net.”
The rally in global stocks has been accompanied by falls in U.S. bonds and the Japanese yen.
The yield on benchmark 10-year Treasury notes, which on Wednesday touched its highest level since May 18, was at 3.0626 percent Thursday, compared with its U.S. close of 3.083 percent.
This week’s rise in yields comes ahead of what is expected to be a hawkish meeting of the U.S. Federal Reserve next week.
All 113 economists in the Reuters poll forecast the Fed to hike rates when it meets Sept 25-26. It is expected to follow that up with one more before the end of this year, taking the fed funds rate to 2.25-2.50 percent.
The two-year yield, which is sensitive to market expectations of Fed rate hikes, was at 2.7951 percent compared with a U.S. close of 2.807 percent Wednesday.
The dollar was 0.1 percent lower against the yen at 112.13 . The euro was 0.1 percent stronger against the greenback at $1.1683.
The dollar index, which tracks the dollar against a basket of six major rivals, was down less than 0.1 percent at 94.478.
U.S. crude added 0.9 percent to $71.77 a barrel, on top of a jump Wednesday that came after new data showed U.S. crude inventories fell 2.1 million barrels last week, its fifth weekly drawdown, to 394.1 million barrels.
That was the lowest level since February 2015.
Brent crude was 0.4 percent higher at $79.73 per barrel.
The weakening dollar pushed gold higher. Spot gold was trading up 0.1 percent at $1,204.97 per ounce.
Reporting by Andrew Galbraith; Additional reporting by Herbert Lash in New York. Editing by Sam Holmes and Kim Coghill