* European shares steady after China enters bear territory
* Tech shares retreat broadly on latest US-China row
* Dollar finds some traction as US yields start to rise
* Metals knocked back in latest trade storms
* Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh
By Marc Jones
LONDON, June 26 (Reuters) - Gains on Wall Street and Europe’s main stock exchanges relieved nervy investors on Tuesday, after the latest escalation in a global trade storm pummeled Wall Street and sent China into bear market territory.
A 0.6 percent rise by the FTSE in London and 0.2 to 0.4 percent gains in Frankfurt, Paris and U.S. markets were a welcome sight, after Asia had extended a sell-off that has now wiped $1.5 trillion off world stocks.
China’s yuan had slumped to a near six-month low against the dollar, and 0.5 to 0.8 percent declines on its big share markets left them down 20 percent from their January peaks, a threshold that defines a bear market.
As markets steadied, the dollar rose nearly half a percent against a basket of six other top world currencies as U.S. and other benchmark bond yields began to climb again, too.
“The sell-off in risk assets has eased, but it is certainly not the last storm we are likely to see coming from that direction,” said Kit Juckes, Societe Generale’s global macro strategist.
The tense atmosphere also kept metals on the defensive as amid worries about the global economic fallout of the U.S. administration’s “America First” agenda.
U.S. Treasury Secretary Steven Mnuchin ramped up the rhetoric on Monday, tweeting that restrictions on investing in U.S. tech firms would apply “to all countries that are trying to steal our technology”.
Wall Street was looking to recover from the previous session’s trauma. The S&P 500 and Nasdaq both suffered their steepest losses in more than two months, while the Dow Jones closed below its 200-day moving average for the first time since June 2016.
The so-called FAANG stocks, which have led momentum in U.S. stocks, were hammered after reaching record intraday highs last week. Facebook dropped 2.7 percent, Amazon <AMZN.O fell 3.1 percent, Netflix slid 6.5 percent, and Alphabet lost 2.6 percent.
Asia then followed, albeit on a smaller scale. Tech-heavy indexes such as South Korea’s KOSPI fell 0.45 percent and Taiwan’s weighted index fell 0.55 percent.
Taiwan Semiconductor Manufacturing Co was down 1.8 percent, South Korean chipmaker SK Hynix Inc lost 1 percent and Chinese tech giant Tencent Holdings shed 0.3 percent.
“Unlike the seemingly spur-of-the-moment tweets by President Trump and the retaliatory exchange of tariffs, Washington’s bid to protect intellectual property is an issue at the heart of a trade row between two powers battling for future global supremacy,” wrote Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities in Tokyo.
“It’s turning out to be a long-term bearish factor for the financial markets, as the United States is unlikely to back down at least through its midterm elections (in November).”
Another sign of the dust gradually settling in Europe was the first rise in European car shares in eight days. Carmakers are another likely target of U.S President Donald Trump’s tariff plans.
The dollar’s resurgence knocked the euro back to 1.1665 from its near two-week high of $1.1722. Against the yen , the dollar was back up at 109.67, having fallen to a two-week low of 109.365 yen. The yen often attracts safe-haven bids in times of political tension and market turmoil.
Brent crude oil futures were up 0.5 percent at $75.14 on uncertainty over Libya’s capacity to deliver on exports commitments. Brent futures had fallen 1 percent overnight as receding investor risk appetite weighed on commodities.
Oil prices were capped after OPEC and its allies on Friday agreed to increase global supplies, albeit modestly.
Trade concerns kept copper on the London Metal Exchange near a 2 1/2-month low of $6,702.5 per tonne brushed on Monday. Spot gold shed 0.8 percent to $1,256 an ounce.
Reporting by Marc Jones Editing by Larry King