* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Trump says trade talks ongoing with China by phone
* Asia markets nudge higher, have been disappointed before
* Pound hits 20-mth low as British PM risks party challenge
* Oil prices bounce after big draw in stockpiles
By Wayne Cole
SYDNEY, Dec 12 (Reuters) - Asian stock markets edged ahead on Wednesday as U.S. President Donald trump sounded upbeat about a trade deal with China, while sterling struggled with talk of an imminent party coup against British Prime Minister Theresa May.
In an interview with Reuters, Trump said talks were taking place with Beijing by phone and he would not raise tariffs on Chinese imports until he was sure about a deal. also said he would intervene in the Justice Department's case against a top executive at China's Huawei Technologies HWT.UL if it would serve national security interests or help close a trade deal. Canadian court on Tuesday granted bail to the executive in a move that could help placate Chinese officials angered by her arrest. were careful to not get too optimistic and MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS firmed a modest 0.27 percent.
Japan's Nikkei .N225 rose 1.5 percent, while E-Mini futures for the S&P 500 ECc1 were up 0.07 percent.
Sterling slid on reports Conservative lawmakers could vote on a no confidence motion in May's leadership as soon as Wednesday night. political ructions come a day after her decision to delay a vote in parliament on her Brexit deal for fear of a rout angered many in her Conservative Party.
The news sent the pound reeling to a 2-month trough of $1.2484 GBP=D3 , a loss of 1.9 percent in just two sessions.
The euro climbed to 90.62 pence EURGBP= , even as it eased on the dollar to $1.1325 EUR= . The dollar was being viewed as the best of a bad bunch and rose to 97.466 on a basket of currencies .DXY .
"The market is concerned that May could be replaced by a Brexit-supporter, increasing the chance of a no-deal scenario," said Rodrigo Catril, a senior FX strategist at NAB.
"Bottom line: there is great uncertainty about whether Theresa May can survive as PM and what the prospects are for a general election, new referendum or a hard Brexit."
"CHOP-FEST"
Sentiment had got a brief lift on Tuesday from reports China was considering cutting import tariffs on American-made cars to 15 percent from the current 40 percent. there were also reports the U.S. would release evidence this week detailing Chinese hacking and economic espionage.
"Even if this (auto) step is taken it just removes what was a retaliatory measure to begin with," noted ANZ economist David Plank. "Whatever the case, market price action is somewhat of a chop-fest, right now, as it swings around on each new headline."
Markets had also been jolted when Trump threatened to shut down the government over funding for a wall he has promised to build on the southern border with Mexico. cross currents left Wall Street mixed, with the Dow .DJI down 0.22 percent and the S&P 500 .SPX 0.04 percent, while the Nasdaq .IXIC added 0.16 percent. .N
Investors were looking ahead to the U.S consumer price report later on Wednesday where an expected slowdown in headline inflation would only reinforce speculation of fewer rate hikes from the Federal Reserve. on a more restrained Fed helped gold steady near a five-month peak of $1,244.12 XAU= an ounce.
Oil bounced a little after industry data showed a surprisingly large draw on stockpiles. O/R
U.S. crude CLc1 rose 50 cents to $52.15 a barrel in Asia. Brent futures LCOc1 had closed 54 cents firmer at $60.51.
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https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations
https://tmsnrt.rs/2Dr2BQA
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Shri Navaratnam)