GLOBAL MARKETS-Stocks fall on Trump's auto tariffs, China bucks the trend

• Asian stock markets: https://tmsnrt.rs/2zpUAr4
• Nikkei down 1%, South Korean shares 1.3% lower
• Hong Kong shares rally, dollar retreats from 3-week top
• Wall Street futures turn positive, European indices in the red

SYDNEY, March 27 (Reuters) - Global stocks fell on Thursday, led by heavy losses in Japan and South Korea, after U.S. President Donald Trump announced new tariffs on auto imports, with European stock futures also pointing to a lower open.

Trump late on Wednesday announced plans for long-promised 25% tariffs on automotive imports. Analysts expect the move to hit European, Japanese and South Korean companies at most.

Japan's Nikkei .N225 fell 1%, while South Korea's KOSPI .KS11 dropped 1.3%. Toyota Motor 7203.T shares tumbled 2.6%, and both Mazda Motor 7261.T and Subaru 7270.T plunged about 6%.

European stock markets are set for a lower open, with pan-European STOXX 50 futures STXEc1 down 0.5% and FTSE futures 0.2% lower.

Trump also said planned reciprocal tariffs on all countries will be "lenient". On China, he said he may give Beijing some reduction in tariffs to get a deal done to sell TikTok.

Chinese shares outperformed the region, with the blue chip index .CSI300 up 0.4% and Hong Kong's Hang Seng .HSI rallying 1%. Chinese EV giant BYD 1211.HK jumped 2.3%.

Jason Chan, a senior investment strategist at Bank of East Asia, said Chinese automakers have limited exposure to the U.S. market, while Trump's comment about TikTok suggest there is room for negotiations.

"It now looks like he's more aggressive toward other markets instead of focusing all his efforts on China, so that could somehow help cushion the sentiment for China and Hong Kong," said Chan.

Gains in Chinese shares helped MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS to trade flat on Thursday.

Wall Street futures also recouped earlier losses and inched up 0.1%. Wall Street already ended sharply lower on expectations of such a move, with the tech-heavy Nasdaq slumping more than 2% on Wednesday.

Following the tariff announcement, U.S. automakers lost ground after the bell. General Motors GM.N slumped 6%, while shares in Ford F.N fell almost 5%.

"It is not feeling at this point like we are going to see a day of complete carnage out there," said Tony Sycamore, analyst at IG.

"I think the timing has caught people off guard, but I don't think the detail of the announcement so much caught people off guard... so now it's just how the Europeans, South Koreans and the Japanese choose to respond."

Japan's Prime Minister Shigeru Ishiba said all options were on the table in response to the U.S. tariffs. Canada said it could impose retaliatory duties, while the European Union expressed regret but was seeking negotiated solutions.

Analysts have warned Trump's tariff plans could stoke U.S. inflation, with the Federal Reserve already pausing its policy easing cycle.

St Louis Fed President Alberto Musalem said on Wednesday it was possible inflation would be higher and growth lower than expected and there was no urgency for the Fed to cut interest rates.

In currency markets, the dollar index =USD, which measures the greenback against six major peers, retreated 0.3% to 104.32, having hit a three-week top of 104.71 overnight.

The euro EUR=EBS touched a three-week low of $1.0731, but bounced off the 200-day moving average and was last up 0.3% at $1.0780. The yen, on the other hand, recovered some of the overnight losses and bounced 0.2% to 150.21 per dollar JPY=EBS on Thursday.

Treasury yields held steady in Asia after edging up overnight. The benchmark 10-year Treasury yields US10YT=RR held steady at 4.3537%, having gained 5 basis points overnight.

The tariff uncertainty sent gold XAU= 0.5% higher to $3,035 per ounce, not far from a record high of $3,057.

Oil prices were marginally higher. Brent futures LCOc1 rose 0.1% to $73.87 a barrel, while U.S. crude futures CLc1 also added 0.1% to $69.73 per barrel.

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