Global Markets: Asia stocks drift lower as Christmas holiday lull counters trade cheer

Asian shares and US stock 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 0.01%.

Blue-chip shares in China rose 0.29% after Premier Li Keqiang said on Monday the government was considering more measures to lower corporate financing costs. Australian shares were unchanged, while Japan`s Nikkei stock index edged 0.02% lower.

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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 U.S. crude 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 U.S. President Donald Trump said an initial U.S.-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-U.S. relations 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 U.S.-China relations, and the U.S. still 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.

U.S. stock futures were unchanged in Asia after the S&P 500 gained 0.09% and the Dow Jones Industrial Average rose 0.34% on Monday.

Shares of Boeing Co gave the Dow a big 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 U.S. tariffs on Chinese goods and a British general election gave the ruling Conservative Party a free hand to enact its Brexit agenda.