By David Hodari 
   -- Gradual tariffs calm investors 
 
   -- European tech pares losses 
 
   -- Draghi urges further banking reform 

Global stocks edged up Tuesday despite the Chinese commerce ministry's threat of retaliation following President Trump's announcement Monday that he would impose new levies on about $200 billion in Chinese goods.

U.S. futures pointed to gains of 0.2% at the opening bell for the S&P 500 and the Dow Jones Industrial Average, with the Nasdaq Composite Index on course to open 0.1% higher.

The Stoxx Europe 600 was flat after China-exposed indexes shrugged off early pressure in Asia-Pacific trading. Hong Kong's Hang Seng closed 0.6% higher, with the Shanghai Composite Index 1.8% higher and the tech-heavy Shenzhen A Share up 1.7%.

Investors reacted with cautious optimism to news late Monday that Washington is to impose further tariffs on Beijing. While the introduction of the tariffs will be staggered, the move still marked an escalation of the continuing trade spat that has dogged relations between the world's two largest economies.

China's commerce ministry said Tuesday that it "has no choice but to undertake synchronous retaliation" to defend its interests, after the White House released details Monday of the 10% tax set to be imposed on a range of Chinese imports including luggage and seafood on Sept. 24. That levy will rise to 25% at the end of 2018.

Investors sold stocks around the world Monday in anticipation of the Trump administration's announcement of fresh levies, and sent the Shanghai Composite to its lowest level since November 2014.

But investors "were expecting tariffs of 25% and instead only got ones of 10% for now so the reaction is quite positive," said Claudia Panseri, European equity strategist at UBS Global Wealth Management.

Also helping the bounce from Monday's selloff were market expectations that negotiations between Washington and Beijing, currently being planned for the coming weeks, will proceed as expected.

Some traders were interpreting the staggered introduction of the tariffs as a sign that the Trump administration is still eager to reach a trade deal with China ahead of midterm elections in November, according to Stewart Cook, head of London sales trading at Berenberg.

The impact of the new tariffs on foreign-exchange trading was limited, with the Chinese yuan 0.2% lower against the dollar. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, gained 0.1%.

China's currency has fallen more than 5% against the dollar so far this year, with analysts pointing to trade tensions as a major factor behind increasingly torpid economic figures out of Beijing. Meanwhile, the U.S. dollar's steady rise has stalled in recent weeks, with strategists suggesting that investors are becoming inured to the trade fight.

The dollar "won't price the same thing over and over again. Part of the recent slowing is that the Chinese were letting the yuan weaken, but since they effectively called a halt to weakening in the currency we've seen things calm down," said Kit Juckes, chief foreign exchange strategist at Société Générale.

The Stoxx Europe 600's technology sector quickly pared early losses, although the sector's initial drop came as Taiwan's tech-heavy Taiex index underperformed most other Asia-Pacific indexes and after the Nasdaq Composite on Monday suffered its heaviest one-day loss since July on Monday.

Those moves signaled investors' increasing concerns that the import taxes visited by the U.S. and China on one another will sting U.S. tech-sector giants with significant manufacturing bases in China.

Importers have in recent weeks sought to be spared from tariffs, with the Trump administration removing about 300 products initially included in the original tariff list released in early July. Smartwatches -- after a direct request from Apple Inc. -- and Bluetooth devices were among the products to be exempted from the levies.

In a further sign of sagging sentiment, investors have taken profits on tech stocks so far in September, with the sector experiencing its sharpest monthly drop in positioning in nine years, according to Bank of America Merrill Lynch's European fund manager survey.

European Central Bank President Mario Draghi urged eurozone governments to take further action to shore up the regions banking sector in a speech early Tuesday.

Mr. Draghi encouraged a number of actions including harmonizing the bloc's rules on how to treat bank liquidity.

Italy's fiscal situation was in focus, though fears that the country's upcoming budget announcement would bring it into conflict with the European Union have ebbed in recent days.

In commodities, Brent crude oil was last up 1.2% at $78.99 a barrel and gold was last down 0.1% at $1,202.28 a troy ounce.

Write to David Hodari at David.Hodari@dowjones.com

(END) Dow Jones Newswires

September 18, 2018 08:56 ET (12:56 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.