TOKYO (Reuters): Asian shares hit an eight-month high on Tuesday as optimism about Chinese measures to boost economic growth lifted mainland markets, however, worries about US earnings and a crucial Brexit summit this week limited gains.

MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.3%, hovering near its highest level since 9 August last year.

Chinese blue chips advanced 0.15% as investors cheered a plan unveiled by China’s State planner on Monday to relax residency curbs in many of its smaller cities and increase infrastructure spending.

“The (Chinese A-share) market’s foundation for upward moves remains positive,” analysts at Kaiyuan Securities wrote in a note on Tuesday. “China’s monetary policy and fiscal policy both continue to be active, (we) don’t see the need for limiting liquidity in the short term.”

Outside of China, however, broader sentiment was largely subdued as investors’ focus remained on potential flashpoints, including a crucial Brexit summit as well as a meeting on trade between the European Union and China set for later on Tuesday.

European shares were set to start on a cautious note, with London’s FTSE futures trading flat and Frankfurt’s DAX futures off 0.2%. E-Mini futures for the S&P 500 lost 0.1%. Japan’s Nikkei drifted 0.1% higher, while Australian shares traded a shade lower.

Wall Street shares delivered a mixed performance on Monday, with the Dow Jones Industrial Average losing 0.3% while the S&P 500 added 0.1%.

Concerns over slowing US earnings have undermined US equities in recent sessions, though a strong jobs report last week helped to soothe frayed nerves.

The S&P 500, however, moved on its own momentum for its eighth straight session of gains and the longest winning streak since October 2017, as rallying crude prices overnight lifted energy shares.

Oil prices rose to their highest since November, driven by fighting in Libya along with ongoing supply cuts pledged by the Organization of the Petroleum Exporting Countries and U.S. sanctions against Iran and Venezuela. “I am still downbeat about US equities because I think they are overvalued going into what will be a slowing economy,” Jim Walker, Hong Kong-based chief economist at Aletheia Capital, told the Reuters Global Markets Forum on Tuesday.

“Not usually a good combination – although the next interest rate move (by the Federal Reserve) will be down.” Investors are wary that there might be “a real sharp correction” in equity markets as stocks have had a great run over the past months, said Nick Twidale, chief operating officer at Rakuten Securities Australia in Sydney.

Twidale added that any news on the trade front around the Sino-US tariff negotiations and the upcoming summit between the EU and China “could really start to add to some volatility” to markets.

On Monday, a top White House official said US officials are “not satisfied yet” about all the issues standing in the way of a deal to end the US-China trade war but made progress in talks with China last week.

Investors will also focus on a European Central Bank meeting on Wednesday and the start in earnest of the US first-quarter earnings period, with analysts now expecting it to be the first quarter of contracting corporate earnings since 2016.

US March inflation figures and minutes of the Federal Reserve’s last policy meeting are due to be released on Wednesday. Friday’s US jobs report showed strong employment creation but subdued wages growth, backing the Fed’s recent dovish policy tilt.

In currency markets, the euro rose slightly to $1.1263 after booking gains of nearly 0.4% - its steepest one-day rise in nearly three-weeks - overnight.

Sterling advanced 0.1% to $1.3081, but stayed not far from last month’s low of $1.2945.

Against the Japanese yen, the dollar was down 0.15% at 111.35 yen, inching back toward its 1-1/2-month low of 109.70 touched on 25 March.

In the commodity market, oil prices hovered near their highest since November 2018 on persistent worries about tightening supplies.

US crude was last up 11 cents at $64.51 a barrel, after brushing its highest since 1 November last year. Brent crude futures tacked on 7 cents to $71.17.

Spot gold was up 0.2% at $1,299.90 per ounce.

Oil hits five-month high above $71 on Libyan supply threat