GLOBAL MARKETS-Asian shares cheered by Brexit deal hopes, sterling shines

* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* MSCI ex-Japan, Nikkei jump on positive Brexit news
* British pound near its highest since May
* EU to determine whether to put deal before EU leaders'
summit

By Swati Pandey
SYDNEY, Oct 16 (Reuters) - Asian shares took off on
Wednesday and sterling held near six-month highs as Britain and
the EU made headway on a Brexit deal ahead of a leaders' summit
though it remained unclear if London could avoid postponing its
scheduled departure on Oct. 31.
Officials and diplomats involved in negotiations over the
acrimonious divorce between the world's fifth-largest economy
and its biggest trading bloc said that differences over the
terms of the split had narrowed significantly. The news lit a fire under European and U.S. equities, which
jumped about 1% on Tuesday. The British pound GBP=D3 rocketed
to $1.28, a level not seen since May 21. It gave back some of
those gains on Wednesday to be last at $1.2759.
The pound has strengthened nearly 5% over the past week as
investors rushed to reprice the prospect of a last-minute Brexit
deal before the end-October deadline.
The positive sentiment extended on Wednesday with MSCI's
broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS lifting 0.3%.
Japan's Nikkei .N225 jumped 1.7% while Australian shares
.AXJO added 0.9% and South Korea's KOSPI index .KS11 climbed
0.7%.
Stronger-than-expected earnings from major U.S. banks
JPMorgan JPM.N , Citigroup C.N and Wells Fargo WFC.N
further boosted sentiment even as the International Monetary
Fund downgraded its 2019 global growth forecast for a fifth
time. "Equities rallied everywhere supported by another set of
Brexit headlines and as earnings season started in the United
States," JPMorgan analysts wrote in a client note.
"Officials cautioned that talks haven't finished yet and
there could yet be problems in hitting the deadline of midnight
Tuesday," they added.
The EU's chief Brexit negotiator Michael Barnier had been
demanding a legal text of any agreement by midnight U.K. time.
However, the talks were still going on between UK Brexit
negotiator David Frost and the EU's executive European
Commission past midnight in Brussels.
The EU will determine whether a deal is fit to be put to
Thursday's leaders' summit for consideration.
"Watching the UK news channels last night, the arithmetic
for achieving said approval is challenging to say the least,"
analysts at National Australia Bank wrote in a note.
Elsewhere, news on the U.S.-China trade front has been less
encouraging.
Bloomberg reported, citing sources, that China will struggle
to buy $50 billion of U.S. farm goods annually unless it removes
retaliatory tariffs on American products, which would require
reciprocal action by U.S. President Donald Trump.
"It is also pretty apparent that President Xi Jinping is not
going to put his signature to a Phase I deal next month unless
or until the U.S. rescinds the threat of imposing additional
tariffs on China on December 15," NAB analysts said.
In currencies, the Japanese yen JPY= was at the lowest in
2-1/2 months against the greenback as investors flocked to
riskier assets. It was last at 109.82 per dollar.
The dollar itself was under pressure against a basket of six
major currencies with its index .DXY hovering near three-week
lows at 98.288. The euro EUR=D3 was flat at $1.1369.
In commodities, Brent crude LCOc1 added 21 cents to $58.94
a barrel, while U.S. crude CLc1 rose 20 cents to $53.01 after
falling the previous session over fears the unrelenting
U.S.-China trade war would keep squeezing the global economy.
O/R
Spot gold was barely changed at $1,481.48 an ounce. XAU=

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(Editing by Sam Holmes)