* MSCI Asia ex-Japan drops 0.2 pct
* European markets seen opening higher
* Pound retains gains after draft deal on future EU-UK relations
* Crude prices continue plunge on oversupply concerns
* Japan markets closed for a holiday
By Andrew Galbraith
SHANGHAI, Nov 23 (Reuters) - Steep losses in Chinese share markets dented Asian equities on Friday as lingering trade war tensions and weak corporate earnings in Europe added to worries about global growth.
With U.S. markets closed overnight for Thanksgiving and Japan on holiday on Friday, early trading lacked direction until the sell-off in China brought on more pain for stock investors in the region.
Shares in Europe, in contrast, are expected to rise Friday. Financial spreadbetters expect London's FTSE .FTSE , Frankfurt's DAX .GDAXI and Paris' CAC .FCHI to advance 0.3 percent each.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.23 percent as Chinese blue-chips .CSI300 tumbled 2 percent and the Shanghai Composite index .SSEC lost 2.2 percent.
China's markets have been mired in a slump as the country's trade war with the United States has exacerbated worries about slowing growth. Few analysts expect sustained improvement for Chinese shares even if U.S. and Chinese leaders make progress in mending ties at a G20 meeting in Argentina at the end of the month. this stage, some economists doubt the G20 talks will bring progress.
Prakash Sakpal of ING in Singapore said there "haven't been any promising developments" since the trade war started.
"There is a lot of rhetoric driving things farther from any sort of solid consensus that both countries could come around."
Seoul's Kospi .KS11 ended 0.6 percent lower and Taiwan shares .TWII lost 0.5 percent. Hong Kong's Hang Seng .HSI was down 0.6 percent in afternoon trade.
Australian shares .AXJO held on to gains, rising 0.4 percent, but posted their second straight weekly loss. equity futures were pointing to weakness on Wall Street when trading resumes Friday. S&P E-mini futures ESc1 were down 0.5 percent at 2,636.
On Thursday, stock markets in Europe were hit by disappointing earnings on further signs that corporate profit growth is peaking globally.
Those earnings underscored the lingering anxiety among equity investors as trade tensions, slowing global investment and growth kept stock markets on the back foot after a torrid October. A draft deal between Britain and the European Union on future relations reached late Thursday did little to lighten the mood.
In the currency market, the pound GBP= was flat, buying $1.2875 after rising more than 1 percent on Thursday on news of the draft agreement between Britain and the EU, which describes a close post-Brexit relationship. The agreement follows a draft treaty last week that set the terms for Britain's departure from the EU in March. the deal faces a rocky ride once it reaches a deeply divided British parliament containing hardline eurosceptic and staunch pro-EU factions, and various shades of grey in-between.
Indeed, analysts at National Australia Bank cautioned against early celebrations.
"After EU leaders are expected to rubber stamp this political declaration alongside the withdrawal agreement at a summit on Sunday, the 'meaningful vote' in the UK Parliament is likely in the second week in December. It would be far too optimistic to declare victory on a deal yet," they said in a note to clients.
The euro EUR= edged up to $1.1413, despite statements by Italy's leaders that they would press ahead with expanding the country's deficit next year and resist pressure from EU authorities to trim its budget, as investors focus on conciliatory rather than confrontational comments. dollar weakened 0.08 percent against the yen to 112.84 JPY= .
China's yuan CNY=CFXS fell to 6.9386 per dollar, with trade concerns weighing. The currency has also come under pressure in recent weeks in sympathy with falling Chinese rates, with yields on shorter-term Chinese government bonds below their U.S. counterparts.
In commodities markets, oil prices hit 2018 lows as U.S. inventories rose to their highest level since December, adding to concerns about a global crude glut. crude CLc1 was trading down 2.5 percent at $53.24 after coming within 5 cents of an October 2017 low reached earlier in the week. Brent crude LCOc1 futures hit their lowest since December 2017 at $61.52 per barrel, and were last down 1.2 percent at $61.85 a barrel.
Spot gold XAU= was flat at $1,227.17 per ounce. GOL/
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