SYDNEY (Reuters) – Asian shares lost steam on Tuesday after scaling a five-month high as investors waited to see if Washington and Beijing can clinch a trade deal, while the pound advanced on hopes UK Prime Minister Theresa May will delay a Brexit deadline.

Spreadbetters pointed to a weak start for Europe with futures for London’s FTSE off 0.6 percent even as fears of a no-deal Brexit faded. U.S. stock futures were down too, with E-Minis for the S&P 500 falling 0.4 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.5 percent from its highest since mid-September as U.S. and Chinese negotiators work to hammer out a deal that would end a protracted tit-for-tat tariff battle.

President Donald Trump said on Sunday he would delay a tariff hike on $200 billion of Chinese imports in the clearest sign yet that both sides were making progress in the talks, but he also sounded a note of caution, saying a deal “could happen fairly soon, or it might not happen at all.”

Tuesday’s losses in Asian stock markets came as JPMorgan analysts urged investors to “curb some of their enthusiasm” over the trade talks, saying the extension to the deadline was a “foregone conclusion”.

“Most assumed this action would occur,” they added. “And it is notable that 1) no new deadline date has been set and 2) there weren’t any formal statements published from either side following the talks in Washington.”

Elsewhere, Indian markets were battered amid concerns about flaring border tensions between India and Pakistan, both of which have nuclear arms. The broader NSE stock index skidded, the rupee fell and bonds rose in a flight to safety.

Australian shares lost 0.9 percent, weighed by energy stocks as oil prices tumbled overnight.

Chinese shares see-sawed between positive and negative territory after a sharp rally the previous day.

Japan’s Nikkei stumbled 0.4 percent as some selling pressure built ahead of the fiscal year-end.

Investors were also wary of weakening estimates for current quarter earnings, with Wall Street on Monday expecting a 0.9 percent decline in S&P first-quarter earnings per share compared with expectations for 5.3 percent growth on Jan. 1, according to IBES data from Refinitiv.

BREXIT DEADLINE

In currency markets, sterling jumped to $1.3149, a near four-week high, in early Asian trade after Bloomberg reported May was expected to allow her cabinet to discuss extending the Brexit deadline beyond March 29 at a crunch meeting later in the day.

The news was a relief to investors who had feared Britain would crash out of the European Union without a deal. However, a delay could anger May’s pro-Brexit colleagues who might then support a vote of no confidence in the government, potentially triggering a general election.

The dollar fell against the safe-haven Japanese yen from its highest since late December. The greenback was last at 110.77.

The dollar index was mostly flat at 96.399 against a basket of currencies.

Markets are now awaiting testimony from U.S. Federal Reserve Chairman Jerome Powell to a U.S. Senate committee on Tuesday, after the central bank last month shifted to a more cautious stance on further interest rate hikes.

“The market will be looking for signs the Fed remains comfortable with the current state of policy,” said Steven Dooley, currency strategist at Western Union Business Solutions. “The markets will also want to hear details about the eventual end of the Fed’s balance sheet reduction programme.”

Investors will also keep an eye on a two-day U.S.-North Korea summit this week where leaders of the two countries will try to reach an agreement on Pyongyang’s pledge to give up its nuclear weapon programme.

Oil prices fell again after posting their largest daily percentage drop this year on Monday as Trump called on OPEC to ease its efforts to boost crude prices, which he said were “getting too high.”

U.S. crude was last down 32 cents at $55.16 a barrel while Brent eased 20 cents to $64.56.