Asia report: US stimulus, Brexit deal boosts shares

Asian shares were higher on Tuesday as investors cheered the Brexit trade deal and the latest US Covid-19 stimulus package.

Japanese stocks hit a 30-year high, with the Nikkei up 2.66% to 27,568 points. Australian shares closed up 0.53%, while in China, stocks were down 0.54%. Hong Kong’s Hang Seng rose 0.94% and in South Korea, the Kospi was up 0.42%.

Having indicated he would not approve the $900bn coronavirus relief package and associated $1.4trln spending bill, US President Donald Trump signed off on both on Sunday, avoiding a partial government shutdown and ensuring millions of Americans would receive direct payments.

Hussein Sayed, chief market strategist at FXTM said an equities selloff had been averted which could provide “one last boost to risk assets in the last four trading days of the year. However, investors shouldn’t get over-excited as most of it is probably already priced in”.

He added that the launch of mass vaccinations throughout Europe yesterday was “also bringing some hope that we are one step closer towards the end of the pandemic”.

In currency markets, the euro was up 0.27% in early trade against the dollar, while sterling failed to break above $1.36 following last week’s Brexit trade agreement as the UK government confessed that it had not secured its desired deal on European access for financial services firms.

In equity news, Jack Ma’s Alibaba Group rose 6.4% despite Chinese regulators demanding a shakeup of its mobile payment and consumer finance arm Ant Group.

Japanese stocks were boosted by gains in Mitsubishi Heavy Industries, up 6%, apparel maker Fast Retailing 4.5% and technology and energy company SoftBank 4.5%.