Asia stocks ease slightly as doubts about risk factors linger

Asian shares edged lower and USstock futures darted in and out of losses on Tuesday, as the holiday lull offset optimism that a US China trade deal will boost exports and corporate earnings.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.14 per cent.

Blue-chip shares in China rose 0.37per centafter Premier Li Keqiang said on Monday the government was considering more measures to lower corporate financing costs.

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Australian shares rose 0.13 per cent, while South Korean shares fell 0.54 per cent. Japan's Nikkei nudged 0.04 per cent higher.

Sterling traded near a four-week low versus the euro and a three-week trough against the dollar on growing doubts over how Britain will navigate the transition period for its exit from the European Union.

Oil prices held steady before data on UScrude inventories later on Tuesday, but there are signs that recent supply cuts may not last after Russia's energy minister said oil producers could ease output restrictions in March.

Wall Street's main indexes posted record closing highs on Monday after USPresident Donald Trump said an initial US-China trade pact would be signed soon.

A de-escalation of a trade conflict between the world's two largest economies is a positive for companies that feed global supply chains, but some investors want to wait until next year to see how long the current thaw in Sino-USrelations lasts.

"Risks to the outlook receded this year, which supported financial markets, but we cannot say the same thing about next year," said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

"No one can predict what will happen with US-China relations, and the USstill has some tariffs on Chinese goods in place."

Trading is expected to be subdued as many financial markets will start closing from Tuesday for the Christmas holidays.

USstock futures rose 0.04 per cent after the S&P 500 gained 0.09per cent and the Dow Jones Industrial Average rose 0.34per centon Monday.

Shares of Boeing Co gave the Dow a boost after the planemaker ousted its chief executive officer over a prolonged crisis following two fatal crashes of its best-selling 737 MAX jetliner.

Equity investors got a rare double dose of positive news earlier this month when Washington and Beijing agreed a preliminary deal to avoid additional UStariffs on Chinese goods and a British general election gave the ruling Conservative Party a free hand to enact its Brexit agenda.

However, currency markets shows some investors remain circumspect, because new problems with trade friction and Brexit could easily emerge next year.

Against the euro, sterling was quoted at 85.66 pence, close to its lowest since November22. The pound traded at $1.2946, close to its lowest since December 2.

Sterling has given up all the gains it made immediately after the British general election on December12.

Spot gold rose 0.3per centto $1,490.30 per ounce. Earlier in the day, prices hit their highest since November7, in another sign that some investors remain wary of risk.

In the onshore market, China's yuan reversed early losses to trade at 7.0115 per dollar.

China's government is considering broad-based and "targeted" cuts in banks' reserve requirement ratio to lower financing costs for small firms, the country's premier said on Monday, showing policymakers remain under pressure to counter an economic slowdown.

UScrude ticked up 0.12 per centto $60.61 a barrel, and Brent crude rose 0.24 per centto $66.55 per barrel.

OPEC and other leading oil producers may consider easing oil output restrictions at their meeting in March, Russian Energy Minister Alexander Novak said in an interview aired on Monday.