*

Potential aversion of U.S. government shutdown boosts

stocks

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Chinese markets jump on expectations of more consumption

stimulus

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Investors remain nervous over escalating global trade

tensions

(Updates to Asia afternoon)

By Rae Wee

SINGAPORE, March 14 (Reuters) - Asia shares rose on

Friday and global markets attempted a rebound after a brutal

selloff earlier in the week, while gold reached a record as the

latest escalation of global trade tensions left nervous

investors seeking safe-haven assets.

Relief over the likely aversion of a U.S. government

shutdown boosted stocks in Asian trade, after Senate Democrat

Chuck Schumer said he would vote to advance a Republican stopgap

funding bill, signalling that his party would provide the

necessary support.

U.S. stock futures rose sharply in response, with Nasdaq

futures up more than 1% at one point and S&P 500 futures

advancing 0.6%.

EUROSTOXX 50 futures similarly gained 0.5% and FTSE

futures gained 0.3%. DAX futures climbed 0.6%.

"For today, at least, this news from Congress is positive

for market sentiment at this point," said Alvin Tan, head of

Asia FX strategy at RBC Capital Markets.

MSCI's broadest index of Asia-Pacific shares outside Japan

traded 0.95% higher, though it was on track to

lose 1.5% for the week, as global trade disputes battered global

stocks.

In the latest in a long list of tariff threats, U.S.

President Donald Trump said on Thursday he would hit imports of

European wine and spirits with duties of 200% if the EU did not

remove retaliatory surcharges on American whiskey and other

products that come into effect next month.

"Trump is making it very clear that if anyone were to

retaliate, his counter-escalation is going to be even sharper,"

said Vishnu Varathan, head of macro research for Asia ex-Japan

at Mizuho.

The latest developments sparked Thursday's steep selloff on

Wall Street and the confirmation that the S&P 500 was in

a correction, just a week after the Nasdaq confirmed the

same.

"I think Trump 2.0 is nothing like Trump 1.0. This time, the

president seems prepared to let U.S. markets and the economy

suffer while he implements his 'America first' goals," said

Michael Strobaek, global chief investment officer at Lombard

Odier.

Typical safe haven assets like gold have meanwhile been

beneficiaries of the escalating trade war, as the yellow metal

reached a record high of $2,993.80 an ounce on Friday. It

was on track to gain 2.6% for the week.

Elsewhere, Japan's Nikkei rose 0.8%.

A surge in consumer shares pushed Chinese stocks higher on

Friday, after the northern Chinese city of Hohhot announced big

cash rewards to boost birth rates.

Investors were also awaiting a press conference next week by

officials from Beijing's top planning agency and elsewhere for

additional measures to boost domestic consumption.

Hong Kong's Hang Seng Index jumped 2.4%, while

China's CSI300 blue-chip index advanced 2.3%. The

Shanghai Composite Index rose 1.7%.

DOLLAR TROUBLE

The dollar regained some lost ground on Friday due to safe haven

flows, but was not too far off recent lows as worries of an

impending U.S. recession and brewing trade tensions kept

pressure on the greenback.

The euro last traded 0.04% lower at $1.08465,

while sterling fell 0.03% to $1.29475.

The euro has drawn additional support from Germany's fiscal

reset plan involving a 500 billion euro fund for infrastructure

and sweeping changes to borrowing rules to revive growth and

ramp up military spending in Europe's largest economy.

Germany's outgoing lower house of parliament will vote on

the measures on March 18 before the formation of a new

parliament on March 25.

Next week will also see a slew of central bank meetings

including the U.S. Federal Reserve, as investors await further

guidance on the rate outlook amid uncertainty over Trump's trade

policies and their impact on U.S. growth and inflation.

"Our assessment is the direction of travel is consistent,

rates will go lower. It's just a question of timing, when they

get to do it," said Mizuho's Varathan.

"I think eventually, the tariffs will be an inconvenience,

not an impediment to the Fed cuts, because even if the prices go

up... it is a negative demand shock and people are worse off,

not better off."

The dollar was last up 0.5% against the yen at 148.50

, but was set for a slight weekly loss against the

Japanese currency as bets for more Bank of Japan (BOJ) rate

hikes ramp up. The BOJ also meets next week.

In commodities, oil prices were higher after falling in the

previous session.

Brent futures rose 0.67% to $70.35 a barrel. U.S.

West Texas Intermediate crude futures added 0.75% to

$67.05 per barrel.