GLOBAL MARKETS-Asian shares track modest global gains, sterling lower

* MSCI Asia ex-Japan +0.13%; Nikkei +0.15%
* Sterling remains weaker after PM Johnson election call
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Andrew Galbraith
SHANGHAI, Oct 25 (Reuters) - Asian shares inched up on
Friday, tracking small gains in world markets as positive
earnings offset economic growth concerns, while sterling
weakened as the prospect of a UK election added fresh
uncertainty to Brexit dramas.
In early trade in Asia, MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS was 0.13%
higher. Australian shares .AXJO added 0.66% and Japan's Nikkei
.N225 ticked up 0.15%.
The British pound, which had fallen 0.51% on Thursday after
Johnson's call for a general election on Dec. 12, extended its
slide, edging down to $1.2844.
British Prime Minister Boris Johnson conceded on Thursday
for the first time that he would not meet his "do or die"
deadline to leave the European Union next week. Continued uncertainty over Brexit comes against the backdrop
of pertinently sluggish growth.
New orders for U.S.-made capital goods fell more than
expected in September and shipments also declined, in a sign
that business investment remains soft. A Reuters poll of economists in recent weeks showed that
most think a steeper decline in global growth is more likely
than a synchronised recovery, despite central bank easing.
In his last meeting as president of the European Central
Bank, Mario Draghi left ECB policy and guidance unchanged, but
advised his successor to "never give up" on propping up the
eurozone economy in the face of a worsening outlook. On Wall Street, strong quarterly results from Microsoft
MSFT.O and PayPal PYPL.O helped lift the tech-heavy Nasdaq,
which closed up 0.81% at 8,185.80.
The S&P 500 .SPX also rose, gaining 0.19% on the day, but
the Dow Jones Industrial Average .DJI finished 0.11% lower at
26,805.53, weighed down by 3M MMM.N after the company cut its
full-year earnings forecast. However, caution prevails despite the gains in risk assets
in recent weeks, supported by apparent progress in Brexit
negotiations and China-U.S. trade talks.
"On the whole, we conclude that we have not entered into a
new 'risk on' phase from a broader trend perspective just yet,"
said George Davis, chief technical strategist at RBC Dominion
Securities.
Investors are also nervous ahead of a summit in Chile where
U.S. President Donald Trump hopes to finalise a partial trade
deal with China's Xi Jinping.
Rattling confidence was a speech by U.S. Vice President Mike
Pence on Thursday, which criticised China's handling of the Hong
Kong protests and its treatment of Muslim Uighurs in the
Xinjiang region. Those comments sent the S&P 500 index briefly
lower. The yield on benchmark 10-year Treasury notes US10YT=RR
was lower, falling to 1.759% compared with its U.S. close of
1.766% on Thursday. The two-year yield US2YT=RR , which rises
with traders' expectations of higher Fed fund rates, was down at
1.5757% compared with a U.S. close of 1.582%.
Investors are widely expecting the U.S. Federal Reserve to
cut interest rates for a third time this year at its monetary
policy meeting next week. Those expectations had helped to lift gold prices, but the
precious metal XAU= was lower on Friday, dropping 0.14% to
$1,501.10 per ounce. GOL/
The dollar gained 0.05% against the yen to 108.66 JPY= and
the euro EUR= was barely lower on the day at $1.1101.
The dollar index .DXY , which tracks the greenback against
a basket of six major rivals, nudged 0.05% higher to 97.680.
Oil prices were lower after rising on Thursday on a surprise
drop in U.S. crude inventories and the hopes for
market-supporting actions by OPEC and its allies.
West Texas Intermediate (WTI) crude CLc1 was down 0.28% to
$56.07 a barrel, and global benchmark Brent crude LCOc1 dipped
0.31% to $61.48 per barrel.