In This Article:
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Stocks erase gains as trade optimism fades
* Oil extend overnight decline
* Analysts warn there are still risks to outlook
By Stanley White
TOKYO, Sept 26 (Reuters) - Asian stocks pared gains on Thursday and safe-haven assets rose as optimism for a quick resolution to the U.S.-China trade war faded.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1%. Japan's Nikkei slid 0.12%.
The pan-region Euro Stoxx 50 futures were down 0.09%, German DAX futures were down 0.02%, while FTSE futures fell 0.03%.
Asian shares got off to a bright start after U.S. President Donald Trump said a deal to end a nearly 15-month trade war with China "could happen sooner" that people think.
However, the positive mood faded and Chinese shares fell 0.35% as Trump's repeated mixed messages about trade negotiations caused investors to curb their enthusiasm.
Treasury prices and gold rose in a sign that some investors preferred safe assets given lingering risks posed by trade friction and political uncertainty.
"Trump is genuinely interested in reaching a trade agreement with China, but he also trusts his advisers and when they tell him what the Chinese are bringing to the table is insufficient, or has been dramatically altered at the last minute," Jeff M. Smith, Research Fellow at the South Asia-Heritage Foundation, said in the Global Markets Forum chatroom
"He's proven more than willing to walk away from a bad deal."
U.S. stock futures fell 0.18% on Thursday, following a 0.62% increase in the S&P 500 on Wednesday.
The United States and China have been locked in a year-long dispute over Beijing's trade practices that has slowed global growth and increased the risk of recession for some economies.
Analysts tempered their optimism over a resolution to the trade war because Trump's public comments often send mixed signals.
Just on Tuesday, Trump sharply criticised China in a speech at the United Nations General Assembly, where he said he would not accept a "bad deal".
Trump and Japanese Prime Minister Shinzo Abe signed a limited trade deal on Wednesday that cuts tariffs on U.S. farm goods, Japanese machine tools and other products while further staving off the threat of higher U.S. car duties.
Japanese shares initially got a boost from the agreement but turned lower in volatile trade as investors squared positions before shares go ex-dividend from Friday.
Australian shares also fell 0.53% percent as scepticism about and end to the trade war set in.