HONG KONG – Asian markets mostly enjoyed gains today following the previous day's advances, with vaccine and economic recovery optimism helping investors look past a frightening surge in virus cases around the world.
As a rollercoaster year draws to a close, two major weights on sentiment – US stimulus and the Brexit trade deal – have been navigated reasonably positively, leaving traders a little more upbeat about the next few months.
With central banks unlikely to step back anytime soon from their vast monetary easing programmes, and vaccines allowing life to get back to some semblance of normality, analysts are hopeful that equities have a long way to go higher.
"This is an economy that is recovering, policy is going to be accommodative for years to come, it suggests a good backdrop for risk assets – it doesn’t mean there aren’t going to be some challenges as we progress over the next couple of years," Brian Levitt, a strategist at Invesco, told Bloomberg TV.
"The reality is the markets are going to be focused on a recovery."
Wall Street's three main indexes dipped from Monday's records on disappointment that Republicans had blocked a move to ramp up stimulus cash handouts, though there is a feeling US lawmakers will eventually push ahead with more support measures as Joe Biden takes over at the White House.
Hong Kong led gains in Asia, rallying 1.5%, while Seoul jumped 1.9% and Shanghai and Taipei also put on more than 1% each. There were also advances in Singapore but Tokyo eased after piling on more than 2% yesterday, while Wellington, Bangkok and Jakarta were also in the red.
Sydney retreated as investor confidence is jolted by fears over a spike in infections in the city.
The clusters come as a mutated strain of the disease, which spreads more quickly but is no more deadly, has been detected in several countries, putting pressure on governments to impose stricter containment measures.
Biden's virus warning
And, Biden warned that the dire situation may not ease up until "well into March".
"The next few weeks and months are going to be very tough – a very tough period for our nation, maybe the toughest during this entire pandemic," he added.
Traders are keeping tabs on Capitol Hill after Donald Trump on Sunday finally signed off on a US$900 billion (RM3.6 trillion) rescue package, which will see hard-up Americans receive up to US$600 handouts to help them through the crisis.
There are hopes his demand for that to be hiked to US$2,000 could come to fruition after the Democrat-run House passed a top-up bill, but Republican Senate Majority Leader Mitch McConnell blocked the measure, refusing to allow a vote.
The president hit out at his party's refusal to provide more cash, tweeting: "Unless Republicans have a death wish, and it is also the right thing to do, they must approve the US$2,000 payments ASAP. US$600 IS NOT ENOUGH!"
Axi analyst Stephen Innes said investors were not expecting anything positive on that front before the end of the year.
"Champagne corks are readying to pop after a hugely and highly unexpected profitable year for many investors. But it would have been nicer to see a US$2,000 cheque in the mailboxes for those that needed it the most," he said in a commentary.
But he added: "While larger stimulus paycheques would always be a welcome addition to the first-quarter consumption bonanza, the current stimulus level as it sits will drive US growth sufficiently higher, bridging the gap when people get vaccinated and return to those activities most impacted by Covid-19 such as dining out, travelling and other personal service-related areas."
Key figures around 0710 GMT
Tokyo - Nikkei 225: DOWN 0.5% at 27,444.17 (close)
Hong Kong - Hang Seng: UP 1.5% at 26,960.96
Shanghai - Composite: UP 1.1% at 3,414.45 (close)
Pound/dollar: UP at US$1.3543 from US$1.3496 at 2245 GMT
Euro/pound: DOWN at 90.70 pence from 90.71 pence
Euro/dollar: DOWN at US$1.2282 from US$1.2250
Dollar/yen: DOWN at 103.31 yen from 103.55 yen
West Texas Intermediate: UP 0.5% at US$48.22 per barrel
Brent North Sea crude: UP 0.3% at US$51.25
New York - Dow: DOWN 0.2% at 30,335.67 (close)
London - FTSE 100: UP 1.6% at 6,602.65 (close). – AFP, December 30, 2020
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