CORRECTED-GLOBAL MARKETS-China worries weigh on Asian stocks

(Corrects paragraph 7 name of bank to ING)
By Alun John
HONG KONG/WASHINGTON, March 23 (Reuters) - Asian stocks
reversed earlier gains on Tuesday, dragged down by declines in
Chinese markets, which were jolted by a new round of sanctions,
after ebbing inflation fears had helped shore up broader
sentiment in the region.
Investors now await a closely watched congressional
appearance by U.S. Federal Reserve Chair Jerome Powell and
Treasury Secretary Janet Yellen.
The negative sentiment appears set to weigh on European
stocks with as EUROSTOXX 50 futures STXEc1 easing 0.42% and
FTSE futures FFIc1 0.61%.
S&P 500 futures ESc1 fell 0.28%.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS dropped 0.76%, hurt by a 1.42% fall in Chinese
blue chips .CSI300 .
The United States and others, including the European Union,
sanctioned Chinese officials on Monday over human rights abuses
in Xinjiang, and Beijing hit back with punitive measures against
European lawmakers, diplomats, institutes and families.
"The fall could be due to the sanctions," said Iris Pang,
chief economist for greater China at ING Wholesale Banking.
"More pressure from international politics is going to affect
asset markets."
Jin Jing, an analyst with China Fortune Securities, said
sanctions hurt risk appetite, in particular for foreign
investors, who sold shares via the Stock Connect.
Persistent worries of policy tightening at home also
continued to weigh on high-flying sectors and stocks with lofty
valuations as investors turned cautious.
Hong Kong's Hang Seng Index .HSI also fell 1.62%, with
traders' attention drawn by a tepid market debut for Baidu
9888.HK in which the Chinese tech giant's shares barely traded
above their secondary listing price.
Beyond China, Asian shares were mixed. Japan .N225 fell
0.61% and Australia .AXJO fell 0.11%, both having earlier
tracked overnight gains on Wall Street, but emerging markets in
the region performed better.
The Dow Jones Industrial Average .DJI rose 0.32%, the S&P
500 .SPX gained 0.70% and the Nasdaq Composite .IXIC added
1.23%, helped by a drop in Treasury yields.
Benchmark 10-year notes US10YT=RR last yielded 1.6717%,
down from 1.732% late on Friday.
Powell said in remarks prepared for a congressional hearing
that the U.S. recovery had progressed "more quickly than
generally expected and looks to be strengthening". "The FOMC last week laid out pretty clearly what the Fed's
view is with regard to rates... the next thing that markets will
focus on is maybe getting some details from Yellen with regard
to further infrastructure investment," said Alex Wolf head of
investment strategy for Asia at J.P. Morgan Private Bank,
referring to a statement from the Federal Open Market Committee.

The dollar gained slightly against a basket of six major
currencies =USD last trading at 91.887, having slipped 0.32%
on Monday, while making advances against the kiwi, Aussie and
sterling.
The New Zealand dollar NZD=D3 hit a three-month low after
the government introduced taxes to curb housing speculation, a
move investors reckoned could allow the central bank to hold
interest rates lower for longer with less risk of a property
bubble.
Oil also dropped amid ample supply and concerns that new
pandemic curbs and slow vaccine rollouts in Europe will slow a
recovery in fuel demand.
U.S. West Texas Intermediate crude oil futures
dropped 1.22% and Brent crude futures LCOc1 dropped by 1.24%.