Trade truce euphoria eases and markets tread water

Global stock markets traded in fairly narrow ranges Tuesday as investors moved on from the latest truce in the costly U.S.-Chinese trade war.

The Trump administration has also ratcheted up tensions with the European Union by proposing additional tariffs on $4 billion of European imports in a dispute over subsidies to aircraft manufacturers.

"Yesterday's optimism in equity markets is beginning to look a little over-eager, with some already drawing worrying parallels to the November 2018 G-20 summit, which was followed up by a dramatic fall for equities," said Chris Beauchamp, Chief Market Analyst at IG.

"The past is not prologue, and the central bank outlook is very different to the end of 2018, as easing comes back on to the agenda, but with volumes drying up ahead of Independence Day and the next earnings season rapidly approaching equities are looking vulnerable to some near-term weakness."

In Europe, London's FTSE 100 rose 0.5% to 7,536. Germany's DAX was flat at 12,519 while France's CAC 40 was steady at 5,570.

On Wall Street, the futures for the Standard & Poor's 500 index and Dow Jones Industrial Average were both down 0.1%.

Earlier In Asia, Tokyo's Nikkei 225 gained 0.1% to 21,754.27. Hong Kong's Hang Seng added 1.2% to 28,875.56 after the latest bout of political protests was quelled with relatively little violence. The Shanghai Composite Index was off 1 point at 3,043.94 and Seoul's Kospi shed 0.4% to 2,122.02.

AUSTRALIA RATE CUT: Australia's central bank cut its benchmark interest rate by a quarter of a percentage point to a record low 1% in a bid to stimulate economic activity. It was the second cut in two months after the Reserve Bank of Australia had held steady for three years. The central bank governor, Philip Lowe, said the cut will "will support employment growth." Lowe said uncertainty generated by the trade and technology disputes was affecting investment.

ENERGY: In the oil markets, traders were digesting the news that OPEC members won the support of other major oil producing nations to extend a production cut for another nine months in a bid to shore up prices at a time of waning demand. Given that the decision was widely anticipated, there was barely any move in markets. Benchmark U.S. crude fell 79 cents to $58.30 per barrel in electronic trading on the New York Mercantile Exchange while Brent crude, used to price international oils, slipped 37 cents to $64.33 per barrel.

CURRENCY: The euro was up 0.1 percent at $1.1297 while the dollar fell 0.3 percent to 108.14 yen.