* Trump says trade talks with China need “different structure”
* Euro zone slowdown sharper than expected in May -PMI
* Turkish lira down to new record low
* Oil falls on shock U.S. stock builds, OPEC supply worries (Updates with opening of U.S. markets; changes dateline, pvs LONDON)
By Laila Kearney
NEW YORK, May 23 (Reuters) - Global stocks sold off while investors raced for the safety of the Japanese yen and some government bonds on Wednesday as concerns rose that setbacks to U.S.-China trade talks would undermine world economic growth.
U.S. President Donald Trump said trade discussions with China would need to be rerouted, saying the current track appeared “too hard to get done” and any agreement reached between the world’s two largest economies needed “a different structure.”
The remarks came a day after Trump said he was not pleased with U.S.-China talks, reversing a rally pegged to the White House’s optimistic comments about the discussions over the weekend that led to a strong rally on Monday.
The Dow Jones Industrial Average fell 107.45 points, or 0.43 percent, to 24,726.96, the S&P 500 lost 8.16 points, or 0.30 percent, to 2,716.28 and the Nasdaq Composite dropped 11.66 points, or 0.16 percent, to 7,366.80.
Trump also floated plans to fine China’s ZTE Corp and cast doubt on a planned June 12 summit with North Korean leader Kim Jong Un.
Fears over the further dampening of U.S. relations with China and North Korea weighed on equities, and the Federal Reserve’s May meeting minutes due for release on Wednesday were also giving investors pause, analysts said.
“A combination of the Fed and the trade worries will make today a rocky session,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
The minutes, which could indicate the number of rate hikes likely this year, are expected to show the Fed taking a more hawkish tone, Cardillo said.
Broad risk aversion hurt the dollar against the Japanese yen. The Japanese yen strengthened 0.75 percent at 110.08 per dollar.
But the greenback managed to rise to a six-month high against the euro on data indicating a slowdown in European business activity.
The pan-European FTSEurofirst 300 index lost 1.17 percent and MSCI’s gauge of stocks across the globe shed 0.67 percent.
Another reason for the euro’s woes is Italy, where an incoming coalition government comprised of the two anti-establishment parties - the League and 5-Star - looks likely to implement big-spending policies.
That could add to the country’s big debt pile and see Rome clash with the European Union.
Italian bonds fell in value, reversing the modest gains seen on Tuesday and 10-year yields rose 11 basis points (bps) to a new 14-month high. The premium investors demand to hold Italian debt versus safer German bonds rose sharply to 192 bps.
Investors were also eyeing Turkey, which is seemingly headed for a full-blown economic crisis as the Turkish lira plunged to record lows.
Elsewhere, oil fell after an unexpected build in U.S. crude and gasoline inventories despite strong demand, and as traders weighed the possibility of an increase in OPEC crude output to cover any shortfalls in supply from Iran and Venezuela.
U.S. crude fell 0.98 percent to $71.49 per barrel and Brent was last at $78.89, down 0.85 percent on the day.
Additional reporting by Sujata Rao, Hideyuki Sano and Tomo Uetake in Tokyo; Karin Strohecker in London Editing by Louise Ireland and Nick Zieminski