HONG KONG – Asian markets mostly rose today following two days of selling, while investors appeared initially unfussed after Donald Trump called a new US stimulus package “a disgrace” and told lawmakers to amend it.
Equities and oil prices have taken a hit recently as virus cases surged across the planet and a new, more transmissible strain was reported in the UK, forcing governments to impose tight restrictions and lockdowns to contain the disease over the festive period.
The worrying spike in infections has overshadowed the rollout of vaccines and news at the start of the week that Congress had finally hammered out an economic rescue package worth around US$900 billion (RM3.7 trillion).
However, Hong Kong, Tokyo, Shanghai, Sydney, Seoul, Taipei and Jakarta were all in positive territory after recent losses, while Wellington extended gains. Singapore and Manila fell.
London opened with losses, though Paris and Frankfurt both rose.
New York stock futures dropped, though, after Trump’s outburst against this week’s stimulus agreement.
The outgoing president slammed the package as not having enough for American families and told Congress to rethink it, raising the possibility of it being held up until after Christmas.
“It really is a disgrace,” he said in a video message posted on Twitter.
“I am asking Congress to amend this bill and increase the ridiculously low $600 to $2,000, or $4,000 for a couple,” he added, referring to relief cheques being prepared.
“I’m also asking Congress to immediately get rid of the wasteful and unnecessary items from this legislation, and just send me a suitable bill.”
Oanda’s Jeffrey Halley said: "Asia's first reaction appears to be that President Trump is bluffing, or that even if Trump vetoes the fiscal stimulus, Congress will act quickly with the necessary votes” to override his veto.
“Given that many Congressional representatives have probably already left Washington DC for the holidays, that could be complacent. For now, markets appear to be holding off pressing the sell button until the situation clarifies”
DailyFX strategist Ilya Spivak warned: "This is yet another catalyst to inspire people to cash out."
And Axi analyst Stephen Innes warned the first quarter of 2021 could be a struggle for markets.
Worries about the impact of new lockdowns on travel have hit oil prices badly, with both main contracts down more than one percent, and around six percent lower since hitting 10-month highs last week.
Investors are keeping a wary eye on post-Brexit trade talks as British and European Union negotiators struggle to find common ground with the deadline just over a week away.
The EU has rejected the latest UK offer on the crucial sticking point of fishing but is ready to pursue an agreement even beyond the end of the year cut-off, diplomats said.
According to sources Britain has also rejected the idea of continuing talks into the new year.
Still, traders remain hopeful a last-minute deal will be hatched, which was providing a little support for sterling. – AFP, December 23, 2020
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