* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Equities eke out gains
* Sentiment still fragile due to U.S.-China trade war
* Policymakers struggle to reduce risks to global economy
By Stanley White
TOKYO, Oct 15 (Reuters) - Asian stocks and Wall Street
futures inched higher on Tuesday as some investors held out hope
that Britain still had a chance to avoid a messy exit from the
European Union at key negotiations this week.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was up 0.1%. South Korean shares .KS11 rose
0.21%, while Japan's Nikkei stock index .N225 was up 1.74%.
Capping broader gains, however, was a perceived lack of
progress coming out of U.S.-China trade negotiations.
Reports of a "Phase 1" trade deal between the United States
and China last week had earlier cheered markets but the dearth
of details around the agreement has since curbed this enthusiasm
with oil prices extending declines, Chinese stocks weaker and
the safe-haven yen holding gains versus dollar.
The focus has now shifted to Europe where officials from
Britain and the EU will meet at a make-or-break summit on
Thursday and Friday that will determine whether or not Britain
is headed for a so-called no-deal Brexit.
"Given the parliamentary intervention, I would say the
chance of a no-deal Brexit is around 10% to 20%," said Shane
Oliver, head of investment strategy and chief economist at AMP
Capital Investors in Sydney.
"If there is a deal, sterling would rally and risk assets
would rally, but the reaction could be limited to a day."
U.S. stock futures ESc1 rose 0.23% on Tuesday in Asia
after the S&P 500 ended 0.14% lower.
Traders, however, cautioned that sentiment remains fragile
because the outcome of Brexit talks is far from certain and the
U.S.-China trade war remains a risk to global growth.
British Prime Minister Boris Johnson wants to strike an exit
deal at an EU summit on Thursday and Friday to allow an orderly
departure on Oct. 31. The main sticking point remains the border between EU member
Ireland and Northern Ireland, which belongs to the UK. Some EU
politicians have expressed guarded optimism that a deal can be
reached.
However, diplomats from the EU have indicated they are
pessimistic about Johnson's proposed solution for the border and
want more concessions.
In the currency market, sterling GBP=D3 edged up to
$1.2620, below a three-month high of $1.2708.
The yen JPY=EBS , often considered a safe haven in times of
economic uncertainty, held steady at 108.35 versus the dollar.
A perceived lack of progress in resolving a prolonged trade
row between the United States and China also weighed on investor
confidence.
Chinese stocks .CSI300 fell 0.38% on Tuesday, led by
declines in the technology sector. In the onshore market, the
yuan CNY=CFXS traded at 7.0654 per dollar, weaker than a
one-month high of 7.0494 reached on Monday.
The United States agreed to delay an Oct. 15 increase in
tariffs on Chinese goods while Beijing said it would buy as much
as $50 billion of U.S. agricultural products after tense
negotiations last week.
However, Washington has left in place tariffs on hundreds of
billions of dollars of Chinese goods.
Trade experts and China market analysts say chances are high
that Washington and Beijing will fail to agree on any specifics
- as happened in May - in time for a mid-November meeting
between Trump and Chinese President Xi Jinping.
U.S. crude CLc1 fell 0.49% to $53.33 per barrel following
a 2% decline overnight due to worries that global energy demand
will remain weak.
Brent crude LCOc1 also fell 0.42% to $59.10 per barrel.
By early last week, hedge funds had become the most bearish
towards petroleum prices since the start of the year, according
to an analysis of position records published by the U.S.
Commodity Futures Trading Commission and ICE Futures Europe.
(Editing by Sam Holmes)