Asian markets mostly fell on Wednesday as investors took their foot off the pedal following weeks of gains, with focus on the signing later in the day of the China-US trade deal.
While the mood on trading floors was broadly upbeat as tensions between the economic superpowers ease, analysts warned there will not likely be much more progress on the next phase of talks ahead of the November US presidential election.
The mini pact, which has de-escalated a two-year stand-off that has jolted the global economy, saw the White House halve tariffs on $120 billion of Chinese goods imposed on September 1 and cancel another round set for December 15. In return, Beijing pledged vast sums to buy US products including pork and soybeans.
Still, the next round of negotiations is expected to be the toughest, with key issues including China's massive subsidies for state industry and forced technology transfer proving key sticking points.
Treasury Secretary Steven Mnuchin denied a report that it could include provisions to roll back more levies on China after the vote.
But he did tell Fox Business network: "I think phase one is an enormous step in the right direction."
Officials said full details would be made public after the signing ceremony in Washington.
"We should not expect further tariff relief until after the November presidential elections, suggesting that today's agreement is probably as good as it gets for 2020," said National Australia Bank's Tapas Strickland.
But he added: "Importantly for China... the deal will allow it to re-focus on its domestic economy which should reduce fears of a slowing economy."
Monday's decision by the US to no longer label China a currency manipulator also provided some relief.
But with few catalysts to drive buying on Wednesday, regional markets tracked a weak lead from Wall Street.
Tokyo ended the morning down 0.5 percent, while Hong Kong slipped 0.6 percent and Shanghai shed 0.7 percent.
Seoul dropped 0.4 percent, while there were also deep losses in Taipei and Manila, with Singapore flat, though Sydney, Wellington and Jakarta all enjoyed small gains.
Still, with most negative headlines in the rear-view mirror, analysts were upbeat.
"Right now we are in a more constructive process," Omar Aguilar, at Charles Schwab, told Bloomberg TV. "While the uncertainty is still there, the fact that there's a laid-out plan for phase one and phase two has already been priced by the market and there is a positive view."
Tokyo - Nikkei 225: DOWN 0.5 percent at 23,914.88 (break)
Hong Kong - Hang Seng: DOWN 0.6 percent at 28,713.27
Shanghai - Composite: DOWN 0.7 percent at 3,086.44
Pound/dollar: UP at $1.3022 from $1.3019 at 2145 GMT
Euro/pound: UP at 85.48 pence from 85.46 pence
Euro/dollar: UP at $1.1130 from $1.1126
Dollar/yen: DOWN at 109.92 yen from 109.98
Brent Crude: DOWN five cents at $64.44 per barrel
West Texas Intermediate: DOWN 11 cents at $58.11
New York - Dow: UP 0.1 percent at 28,939.67 (close)
London - FTSE 100: UP 0.1 percent at 7,622.35 (close)
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