Updates to Asian afternoon

By Ankur Banerjee

SINGAPORE, March 25 (Reuters) - Asian stocks stumbled on Tuesday, dragged by a slide in Chinese tech shares after a strong rally, while investors weighed the prospect of narrower-than-feared U.S. tariffs and the dollar hovered near three-week highs after upbeat economic data.

Investors have been focused on the impending reciprocal tariffs promised by U.S. President Donald Trump and its impact on the global economy as trade war fears grip markets.

Trump said on Monday automobile tariffs are coming soon even as he indicated that not all of his threatened levies would be imposed on April 2 and some countries may get breaks, suggesting some room for negotiations.

That led to an exuberant risk-on reaction overnight. The S&P 500 .SPX closed at its highest in over two weeks, while a rally in tech stocks led Nasdaq .IXIC up over 2% on Monday.

Asian stock bourses initially joined in on Tuesday morning but by mid-afternoon the relief rally looked set to fizzle out. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was 0.35% lower ahead of European open.

European futures STXEc1 were down 0.24%, while S&P 500 EScv1 and Nasdaq NQc1 futures inched lower.

Charu Chanana, chief investment strategist at Saxo, said the high degree of uncertainty would make business planning extremely difficult.

"While markets can react to every tariff headline, businesses cannot. Businesses need clarity - and the lack of it could weigh on earnings soon," Chanana said.

Kyle Rodda, senior financial markets analyst at Capital.com, said there was still a need to see the full detail of what the tariffs would entail, and whether they represented the full extent of the Trump administration's "bid to shake up the global trading system."

"I don't think we are out of the woods completely yet."

Hong Kong's Hang Seng index .HIS fell 1.8%, as tech stocks led a broad selloff, with Xiaomi's 1810.HK $5.5 billion upsized share sale triggering concerns about stretched valuations across the market. .HK

"Xiaomi's placement is only an 'excuse' for the market decline in general, after this round of a 6,000-point rally," said Steven Leung, director of institutional sales at UOB Kay Hian in Hong Kong, referring to strong rally in Hang Seng this year.

The Hang Seng is up 17% this year, still the best-performing major stock market in the world on AI bets after startup DeepSeek's sparkling debut.

DATA LIFTS DOLLAR

The dollar hit a three-week high against the yen JPY=EBS at 150.95, after jumping 0.9% in the previous session, while hovering at its strongest since March 6 at $1.0781 per euro EUR=EBS after stronger-than-expected U.S. economic data.

Data showed S&P Global's flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 53.5 this month from 51.6 in February. A reading above 50 indicates expansion in the private sector.

The PMI would suggest the economy was regaining speed after hitting a soft patch halfway through the first quarter. But so-called hard data, including retail sales and the employment report, have hinted at cracks in the foundation of the economy.

The strong dollar also cast a shadow across emerging markets. Indonesian rupiah IDR= sank to its lowest level since June 1998 during the Asian financial crisis on mounting concerns over the country's fiscal health.

Investor attention will now be on the size of the reciprocal tariffs to be announced next week as well as which countries will be targeted by the Trump administration.

Oil prices were little changed on Tuesday after rising 1% in the previous session as investors weighed the impact of Trump's announcement of tariffs on countries buying oil and gas from Venezuela. O/R

Brent crude futures LCOc1 were up 2 cents at $73.02. U.S. West Texas Intermediate crude futures CLc1 was flat at $69.11.

Gold XAU= was steady at $3,015.87 per ounce after a Federal Reserve official signalled a cautious stance on interest rate cuts this year. GOL/

(Reporting by Ankur Banerjee; Editing by Christian Schmollinger and Sonali Paul)

((ankur.banerjee@thomsonreuters.com;; Mobile - +65 8121 3925;))