GLOBAL MARKETS-Shares lose steam, sterling off 5-mth peak with Brexit talks set to resume

* European, U.S. stock futures down 0.2-0.3%
* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* MSCI ex-Japan, Nikkei jump on positive Brexit news
* British pound slips after hitting 5-month peak
* EU to determine whether to put deal before EU leaders'
summit

By Swati Pandey and Hideyuki Sano
SYDNEY/TOKYO, Oct 16 (Reuters) - Shares markets lost some
steam in Asian trading on Wednesday while sterling came off
five-month highs as investors remained uncertain whether crunch
talks in Brussels would lead to a deal to avoid a disorderly
British exit from the European Union.
European stocks were on track to open lower after big gains
the previous day, with pan-European Euro Stoxx 50 futures
STXEc1 down 0.19%, German DAX futures FDXc1 shedding 0.25%
and FTSE futures FFIc1 losing 0.39%.
U.S. S&P500 futures ESc1 fell 0.3% also on rising caution
over U.S-China trade deal after China lambasted new legislation
taking a hard line on China.
U.S. and European shares had jumped on Tuesday as officials
and diplomats involved in Britain's negotiations with the EU
said differences between the two sides had been narrowed
significantly. As last-ditch talks continued well beyond midnight, caution
set in among investors, and the British pound GBP=D3 slipped
back to $1.2752, dropping 0.3%, having shot up to $1.28 on
Tuesday, a level unseen since May 21.
The pound had 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 EU's chief Brexit negotiator Michael Barnier had been
demanding a legal text of any agreement by midnight U.K. time.
However, the talks between Britain's Brexit negotiator David
Frost and the EU's executive European Commission went well past
midnight in Brussels, and were set to resume on Wednesday.
The EU will determine whether a deal is fit to be put to
Thursday's leaders' summit for consideration, but even then
there is a question whether Britain's minority government could
win approval for any deal from the country's divided parliament.
"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.
Many Asian share markets still held some gains in the wake
of Tuesday gains by U.S. and European equities.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.4% while Japan's Nikkei .N225 jumped
1.5%, hitting 10-month highs.
South Korea's KOSPI index .KS11 climbed 0.6%, encouraged
by South Korea's central bank cutting its policy interest rate
for the second time in three months.
Stronger-than-expected earnings from major U.S. banks
JPMorgan JPM.N , Citigroup C.N and Wells Fargo WFC.N also
boosted equities even as the International Monetary Fund
downgraded its 2019 global growth forecast for a fifth time.
Indeed, 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.
China also said Beijing resolutely opposed new measures
passed by the U.S. House of Representatives related to the Hong
Kong protests and urged lawmakers to stop interfering.
The news helped to lift the safe-haven Japanese yen JPY=
from a 2-1/2 month low hit on Tuesday against the dollar.
The yen stood at 108.68 per dollar, compared to Tuesday's
low of 108.90.
The dollar's index against a basket of six major currencies
.DXY hovered near three-week lows at 98.316. The euro EUR=
was little changed at $1.1032.
In commodities, Brent crude LCOc1 added 10 cents to $58.84
a barrel, while U.S. crude CLc1 rose 7 cents to $52.88 after
falling the previous session over fears the unrelenting
U.S.-China trade war would keep squeezing the global economy.
O/R
Spot gold firmed slightly to $1,483.86 an ounce. XAU=

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(Editing by Sam Holmes, Lincoln Feast and Simon Cameron-Moore)