TOKYO (AP) — Stock markets eased back on Tuesday after hopes over Brexit and a trade truce between the U.S. and China had led to a rally and new record highs on Wall Street.

Germany’s DAX slipped 0.7% to 13,315 in midday trading while France’s CAC 40 lost nearly 0.2% to 5,972. Britain’s FTSE 100 fell 0.1% to 7,509.

U.S. shares pointed toward a slightly lower open in premarket trading, with Dow futures inching down 0.1% to 28,231. S&P 500 futures declined less than 0.1% to 3,197.

Markets got a big boost in confidence after the U.S. and China announced a long-awaited “Phase 1″ trade deal.

The two sides agreed to cut tariffs on some of each others’ goods and postpone other tariff threats, the first time the two countries have stepped back from the brink in their 17-month trade fight. In return, China promised to ramp up its purchases of U.S. agricultural, energy and other goods and to stop forcing U.S. companies to turn over technology as a condition of doing business in that country.

The trade pact alleviated some uncertainty, though many issues remain unresolved.


“As long as both sides continue to talk up the phase one agreement, then Santa may well deliver the end of December rally that every investor craves this time of year. We just have to hope that we’re not getting overly excited about an exquisitely wrapped lump of coal,” Craig Erlam of Oanda said in a commentary.

Stronger than forecast Chinese retail sales and factory activity in November have contributed to the festive mood.

But a more sober appraisal of the future of Brexit has dampened investor spirits somewhat. After market rallies in Europe since last week’s British election result, investors appeared spooked somewhat by reports that Prime Minister Boris Johnson wants to set up a law ruling that a trade deal with the EU must be struck by the end of the year.

The move would set up another deadline that will hang over markets after Britain leaves the EU on Jan. 31, as scheduled. The pound fell a sharp 1.1% to $1.3193.

In Asian trading, Japan’s benchmark Nikkei 225 added 0.5% to finish at 24,066.12, while South Korea’s Kospi gained 1.3% to 2,195.68. Hong Kong’s Hang Seng added 1.1% to 27,805.60, andthe Shanghai Composite stood at 3,022.42, up 1.3%. Australia’s S&P/ASX 200 was little changed at 6,847.30.

Shares also rose in India and Taiwan, but fell in Thailand.

In energy markets, benchmark U.S. crude rose 16 cents to $60.37 a barrel in electronic trading on the New York Mercantile Exchange. It rose 14 cents to $60.21 a barrel on Monday. Brent crude, used to price international oils, added 24 cents to $65.58.

Elsewhere, the dollar rose to 109.59 Japanese yen from 109.54 yen on Monday. The euro strengthened to $1.1159 from $1.1148.