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SYDNEY (Reuters) - Asian shares faltered on Wednesday amid fears of rising U.S. protectionism as President Donald Trump fired his Secretary of State, regarded as a moderate in his administration, and sought to impose hefty tariffs on Chinese imports.

FILE PHOTO - A man walks past an electronic stock quotation board outside a brokerage in Tokyo, Japan, February 9, 2018. REUTERS/Toru Hanai

The combination of moves by Trump left investors scurrying for safety as global equities took a knock, the dollar fell and bonds rose.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS stumbled 0.7 percent, retreating from a 1-1/2 month high hit on Tuesday, with technology sector the biggest drag.

Japan's Nikkei .N225 dropped 1 percent and South Korea's Kospi index .KS11 declined 0.6 percent. China's SSE Composite index .SSEC and the blue-chip CSI 300 .CSI300 slipped 0.3 percent each.

The weakness followed overnight losses on Wall Street, with the Dow .DJI off 0.7 percent, the S&P 500 .SPX down 0.6 percent and the Nasdaq Composite .IXIC falling 1.0 percent.

The selling intensified after Trump dismissed Tillerson following a series of public rifts over policy on North Korea, Russia and Iran. He was replaced with loyalist CIA Director Mike Pompeo.

The move comes only days after the exit of White House economic advisor Gary Cohn who was a strong proponent of free trade, reinforcing investor uncertainty about Trump’s future policies.

“Tillerson’s departure has left some worrying that it provides a green light to those in the office pushing for more protectionist measures,” analysts at ANZ Bank said in a note to clients. “Protectionism is on the rise.”

Since Trump took office in 2017 as many as 35 senior officials from his administration have walked out, including Tillerson, according to Citi.

Separately, Trump is looking to impose tariffs on up to $60 billion of Chinese imports, targeted at information technology, consumer electronics and telecoms, two people who had discussed the issue with the administration said.

That sent the MSCI Asia ex-Japan IT index MIAX0IT00PUS declining 0.6 percent. Large Asian technology stocks such as Samsung Electronics (005930.KS), LG Display (034220.KS), Tencent Holdings (0700.HK) and Taiwan Semiconductor (2330.TW) were all down by more than 1 percent.

“A U.S.-China trade war is the main risk,” said Sydney-based AMP Chief Economist Shane Oliver. “A full-on global trade war is unlikely – but there may not be much peace on the trade front either.”

Investors suspect policymakers who favor protectionism will also seek to use the currency as a trade weapon, if not overtly then through benign neglect.

INFLATION

As news from the United States dominated, investors shrugged off stronger than expected data from China which showed the country’s industrial output expanded at a surprisingly faster pace at the start of the year. Fixed asset investment also handily

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