TOKYO / NEW YORK (Reuters) – Asian equities rose on Tuesday, with Japanese equities reaching a 30-year high as investor risk fueled by a Brexit trade deal and hope to extend a long-awaited US pandemic relief package .
MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 0.45%. Australian shares were up 0.53%. The Japanese Nikkei rose 2.4% to its highest level since August 1990. Shares in China picked up the trend and fell by 0.32% with profit-taking.
Futures for the S&P 500 added 0.4%.
Euro Stoxx 50 futures rose 0.42%, German DAX futures rose 0.53% and FTSE futures rose 1.12%, marking a bright start for European trade.
The dollar made losses against major currencies and Treasury yields rose after US President Donald Trump approved a $ 2.3 billion stimulus package to counter the effects of the coronavirus pandemic.
While the package has yet to pass the Senate, Trump’s approval sent shares on Wall Street Sunday to peak on Monday amid heightened optimism about an economic recovery.
“With Brexit … and the US stimulus agreement now in the rearview mirror, there is a sense of relief that we have avoided the various worst-case scenarios,” said Stephen Innes, chief global market strategist at Axi, a broker.
Britain concluded a close Brexit trade agreement with the EU on Thursday, just seven days before leaving one of the world’s largest trading blocs.
The demand for more risky assets has kept the US dollar, often considered a ‘safe haven’, on the back foot. It fell by 0.02% against a basket of major currencies.
The dollar short was recently a popular trade and calculations by Reuters based on data released by the Commodity Futures Trading Commission on Monday suggest the trend may continue. Short positions on the dollar increased to $ 26.6 billion in the week ended December 21, the highest in three months.
The dollar index against a basket of six major currencies fell to 90,137, not far from the lowest in more than two years.
Sterling rose to $ 1.3483 following the confirmation last week of a widely agreed trade agreement between the UK and the EU.
A sluggish dollar boosted gold prices, which rose 0.33% to $ 1,877.56 ounces.
Jack Ma’s Alibaba Group Holding Ltd rose 6.4%, achieving six straight sessions of declines. Analysts said these gains could be short-lived as Chinese regulators called for a stir from Ant Group, Alibaba’s mobile payments and consumer finance team.
Analysts have also expressed concern that other major Chinese technology companies could face more government scrutiny, which could limit investment in the sector.
Oil prices recovered after falling overnight due to concerns about increased supply and lower demand amid fresh COVID-19 travel restrictions around the world.
Brent crude rose 0.45% to $ 51.09 a barrel. U.S. crude rose 0.48% to $ 47.85 a barrel.
More US fiscal stimulus has also eased concerns about the threat of new coronavirus variants identified in Britain and South Africa.
The yield on 10-year treasury notes rose to 0.9381%, but the two-year decline to 0.1270%.
Reporting by Stanley White and Koh Gui Qing; Edited by Sam Holmes, Stephen Coates and Jane Wardell