* Hopes of economic re-opening support developed market shares
* Hong Kong, China shares hit by new protests
* Yuan falls to lowest since September
* S&P500 mini futures near Tuesday's high
* European shares seen rising 0.3%
By Hideyuki Sano and Koh Gui Qing
TOKYO/NEW YORK, May 27 (Reuters) - Fresh political unrest in Hong Kong over Beijing's proposed national security laws in the city hit Asian share markets on Wednesday, even as optimism about the re-opening of the world economy supported a broader global stock rally.
Riot police in the Asian financial hub fired pepper pellets on protesters in the main business district, rekindling concerns about the disruptive protests seen last year that hit the territory's economy. capped regional stocks with MSCI's ex-Japan Asia-Pacific index .MIAPJ0000PUS losing 0.12%, as Hong Kong and mainland China shares extended declines.
Hong Kong's Hang Seng .HSI lost 1.0% while mainland shares .CSI300 were down 0.5%, amid fears the protests would worsen diplomatic and trade tensions between the United States and China.
Elsewhere, however, investors were still buoyed by optimism about a post COVID-19 recovery.
European stocks are expected to rise with pan-European Euro Stoxx 50 futures STXEc1 up 0.3%. German DAX futures FDXc1 rose 0.5%, FTSE futures FFIc1 were up 0.5%.
"Macro hedge funds are covering their short positions in developed markets' stocks as their bet on a second wave of the coronavirus and a double bottom in markets have not materialised," said Masanari Takada, cross asset strategist at Nomura Securities.
E-Mini futures for the S&P 500 ESc1 rose 0.7% to edge near their 2-1/2-month high touched the previous day, as the index tackle a major chart point of its 200-day moving average.
The index had cleared 3,000 points in Wall Street overnight before pulling back, as some traders returned to the New York Stock Exchange floor for the first time in two months. Nikkei .N225 rose 0.7% to 2-1/2-month highs while Australian shares .AXJO hit a similar milestone before giving up most of gains.
The index of world's 49 stock markets .MIWD00000PUS stood near 2-1/2-month highs, having gained 2.7% so far this month on hopes of economic recovery in the developed world as countries ease social restrictions.
Economic data published on Tuesday showed U.S. consumer confidence nudged up in May and new home sales beat expectations.
"We have seen a clear sign of rising expectations in economic recovery. Now we are beginning to see evidence of various stimulus supporting the economy," said Toshifumi Umezawa, strategist at Pictet.
But the China focus remains a key weight for sentiment after U.S. President Donald Trump on Tuesday said he was preparing to take action against China this week over its effort to impose national security laws on Hong Kong. relations between the world's two biggest economies could further hobble global business activity, which is already under intense pressure due to the coronavirus pandemic.
The Chinese yuan also weakened to the lowest levels since early September in both onshore and offshore trade. The onshore renminbi slipped 0.3% to as low as 7.1595 per dollar CNY=CFXS while the offshore unit fell 0.4% to 7.1760 per dollar CNH= .
The yuan's fall also weighed on risk-sensitive currencies. The Australian dollar slipped 0.2% to $0.6640 AUD=D4 .
The euro dipped 0.2% to $1.0955 EUR= while the yen barely moved at 107.52 per dollar JPY= .
U.S. Treasury yields retreated from lows, with ten-year yields US10YT=RR at 0.692%, having risen about 4 basis points on Tuesday.
Gold prices dipped slightly XAU= to $1,707.5 per ounce, slipping further from 7 1/2-year high of $1,764.8 touched last week.
Oil prices slipped slightly on concerns about U.S.-China tensions with U.S. West Texas Intermediate crude futures CLc1 down 0.6% at $34.14 per barrel. (Editing by Sam Holmes)