Global Markets: Asian stocks ride Wall Street momentum to 17-month peak, pound slips

Asian shares rose to their highest in more than a year on Tuesday, as trade deal optimism and Wall Street`s run to all-time highs supported sentiment, while familiar fears of a hard Brexit knocked the pound. The mood carried MSCI`s broadest index of Asia-Pacific shares outside Japan up 0.6% to its highest since July 2018. Japan`s Nikkei hit its firmest in more than year, Hong Kong`s Hang Seng rose almost a percent.

Korea`s Kospi stood at its highest since May and Shanghai blue chips rose 0.6%, while Australia`s S&P/ASX 200 eked a tiny extension to Monday`s big gains. Bond markets, currencies and commodities were more circumspect, and futures trade pointed to softness in Europe and a flat open the United States after a bumper Monday.

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"As long as volatility remains low, momentum is probably continuing, despite the amazing year to date gains," said Kay Van-Petersen, global macro strategist at Saxo Capital Markets in Singapore.

"The risk is that nobody thinks that there`s anything left for the year, they`re all thinking 2020."

The preliminary deal between Washington and Beijing will double U.S. exports to China, White House adviser Larry Kudlow told Fox News on Monday. The United States will also reduce some tariffs on Chinese goods under the agreement.

It is not yet signed, and the Chinese side have been more circumspect in their praise, but U.S. Trade Representative Robert Lighthizer said over the weekend it is "totally done".

The three major U.S. stock indexes rose modestly, but posted record closing highs. So did the pan-European STOXX 600 index.

The Dow Jones Industrial Average rose 0.4%, the S&P 500 added 0.7% and the Nasdaq almost one percentage point. For the year to date, the Nasdaq has increased its value by a third, while the other indexes are up by more than 20%.

In Britain, the FTSE 100 had its biggest daily gain in almost a year. But after the closing bell some familiar fears returned.

ITV reported Prime Minister Boris Johnson would use his huge majority to reinstate a hard deadline for quitting the European Union at the end of next year, again raising the spectre of a chaotic "hard" Brexit.

Sterling fell 0.6%, before recovering slightly.