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Treasury Secretary Bessent says Trump-Xi meeting still on

track

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Samsung Electronics ( SSNLF ) drives Korean market higher

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Gold sets record above $4,100 per ounce

(Recasts, updates prices)

By Gregor Stuart Hunter

SINGAPORE, Oct 14 (Reuters) - Asian stocks tumbled on

Tuesday, dogged by growing doubts over whether China and the

U.S. could strike a tariff deal when the world's two largest

economies meet later this month amid revived tensions over

trade.

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

shed early gains to fall 1.2% as S&P 500 futures

slid 0.6%. The Nikkei stock index fell as much as

3%.

"Both Washington and Beijing are posturing before the

November summit - escalate to de-escalate," said Marc Velan,

head of investments at Lucerne Asset Management in Singapore.

"Neither can afford a trade war heading into U.S. mid-terms."

Markets had earlier joined the rebound from Monday's cash

session after U.S. Treasury Secretary Scott Bessent said

President Donald Trump remains on track to meet Chinese leader

Xi Jinping in South Korea in late October. But he added fuel to

the fire in an interview in the Financial Times where he accused

Beijing of trying to damage the global economy.

As negotiations between the U.S. and China intensify, the

two nations will from today begin charging port fees on ocean

shipping firms that move everything from holiday toys to crude

oil.

Wall Street's main indexes had ended as much as 2.2% higher

on Monday, led by chipmakers, after Trump struck a more

conciliatory tone on trade tensions with China, reversing some

of the panic from Friday when Trump announced 100% tariffs on

China.

Citi analysts said they do not expect an escalation of trade

tensions between Beijing and Washington.

"The reason is not so much the reassuring President Trump

tweet over the weekend, but the fact that China may be the only

country with bargaining power, where the U.S. may have to be

more flexible in its negotiation stance," Citi wrote.

But a spokesperson for China's commerce ministry said on

Tuesday the U.S. cannot seek talks while also making threats,

keeping markets on edge over the chances for a broader trade

deal.

Beijing announced sanctions on Tuesday against five

U.S.-linked subsidiaries of South Korean shipbuilder Hanwha

Ocean.

After early gains in Hong Kong, the Hang Seng Index

fell 2%, while in the mainland, the CSI 300 gauge of blue-chip

Chinese stocks slipped 1.3%.

Asian chipmakers veered sharply between gains and losses.

TSMC clung to gains after OpenAI said it has partnered

with Broadcom ( AVGO ) to produce its first in-house artificial

intelligence processors.

South Korea's Kospi index erased early gains,

dragged by the broader selloff. The market had rallied at the

start of the session, helped by Samsung Electronics' ( SSNLF )

, which projected a better-than-expected 32% rise in

third-quarter profit, although the tech giant lost 1.7% as the

day progressed.

The yen strengthened 0.3% to 151.85 against the dollar

after Japan's finance minister warned the country needs a

new economic strategy that deals with inflation, rather than

deflation.

The yield on the U.S. 10-year Treasury bond was last

4.0187%, down 3.23 basis points compared with a previous close

of 4.051%.

"Trump's latest tariff threats are still seen primarily as a

negotiation tactic, rather than policy reality," analysts from

Danske Bank wrote in a research report.

They noted any escalation in the trade war would only

increase the likelihood of the Federal Reserve front-loading

planned rate cuts.

Traders expect Fed easing later this month is a

near-certainty. Pricing of Fed funds futures implies a 96.7%

probability of a 25-basis-point cut to interest rates at the Fed

meeting on October 29, compared with a 98.3% chance a day

earlier, according to the CME Group's FedWatch tool.

The euro was barely changed at $1.1584 after French

President Emmanuel Macron rejected calls to resign on Monday, as

his latest government was threatened by two no-confidence

motions.

Brent crude was last down 0.4% at $63.06 per barrel

after an OPEC report showed world oil supply is expected to

closely match demand next year, a contrast from last month's

outlook, which projected a shortfall.

Gold slipped 0.2% to $4,104.39 per ounce, pausing for

breath after setting a fresh record.

Bitcoin tumbled 3.1% to $112,235.34, while ether

tanked 6.5% to $4,012.79.