* Asian shares down for the eighth straight day
* Dour mood follows from losses in U.S., Europe on Friday
* Trade tensions a major worry for share investors
* U.S. Fed widely expected to raise rates later this month
By Marc Jones
LONDON, Sept 10 (Reuters) - World shares were flirting withtheir longest run of declines since early 2016 on Monday, hit byrising anxiety about the U.S.-China trade war and anotherinterest rate increase by the Federal Reserve later this month.
Europe defended its ground early on , but itwas proving a struggle after a fresh sell-off by Chinese shares pulled Asian and emerging-market equities to 14-month lows.
Traders were bracing for a potential escalation in theSino-U.S. tariff row after U.S. President Donald Trump raisedthe stakes in the dispute on Friday.
He said he was ready to impose tariffs on virtually allChinese imports into the United States, threatening duties onanother $267 billion of goods in addition to the $200 billionalready facing threatened tariffs.
On top of that, strong U.S. jobs numbers on Friday hadbolstered bets on a higher dollar on expectations the FederalReserve will keep raising U.S. interest rates.
"It's more of the same, markets continue to be underpressure from a whole host of headwinds," said fund managerGAM's Investment Director of emerging market equities, Tim Love.
He pointed to the latest fall in China's currency, the yuan,which is now down almost 9 percent versus the dollar sinceApril. "You are back to the highly politically charged question- is this currency manipulation or not?"
Europe's resistance to the gloom was led by Milan, whichjumped 1.5 percent as soothing comments on Italy'supcoming budget by Economy Minister Giovanni Tria pushed downthe country's borrowing costs in the bond markets.
Stockholm also strengthened along with the Swedishcrown after the nationalist Sweden Democrats gained lessground than expected in weekend elections.
The crown rose about 0.6 percent against the euro to 10.43 crowns. The euro was up 0.1 percent against the dollarat $1.1566 after falling more than half a percent on Fridayfollowing the U.S. jobs data.
FRAGILE CHINA
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.9 percent to the lowest since July 2017,extending losses from last week when it dropped 3.5 percent forits worst weekly showing since mid-March.
Beijing had warned of retaliation if Washington launches anynew trade measures. But it is running out of room to match themdollar-for-dollar, raising concern it would resort to othermeasures, such as weakening the yuan or taking action againstU.S. companies in China.
Chinese shares were battered with the blue-chip index off 1.4 percent. Shanghai's SSE Composite fell1.2 percent and Hong Kong's Hang Seng index shed 1.3percent.
Japan's Nikkei ended 0.3 percent higher afterrevised second-quarter data showed the world's third-biggesteconomy grew at its fastest pace since 2016.
Trump, who is challenging China, Mexico, Canada and theEuropean Union on trade issues, has also expressed displeasureabout the large U.S. trade deficit with Japan .
The latest 14-month low for emerging-market shares cameamid turbulence in Argentina, Turkey, Brazil, Russia and SouthAfrica, where currencies have been routed recently.
Some Asian economies are vulnerable, too, Nomura analystssaid, with many countries burdened by high private debt. Theyalso noted a "concentration risk" from some of the world'slargest funds' heavy investments in emerging-market assets.
The Indian rupee hit a record low of 72.50 per dollar and Indonesia's rupiah - Asia's second-worst performer this year - weakened 0.4 percent, near an all-time low.
"Given the latest comments from Trump, investors are likelyto see the potential for further depreciation in EM currencieswith the trade war cranking up yet another notch," said NickTwidale, Sydney-based analyst at Rakuten Securities Australia.
The Australian dollar , a proxy for Chinese growthbecause of the large amount of metals it sells there, hoverednear its lowest in 2 1/2 years and was last at $0.7115.
Copper tumbled over 1.2 percent to cement the 20 percentdrop it has seen already this year. Spot gold was lower at$1,193.01 .
Oil prices bucked the trend, after three straight days oflosses. U.S. crude futures were up 44 cents at $68.20 perbarrel and Brent crude futures added 52 cents to $77.35a barrel.
(Additional reporting by Swati Pandey in Sydney, editing byLarry King)
Messaging: marc.jones.thomsonreuters.com@reuters.netTwitter@marcjonesrtrs))