Asian Stocks Up After Trump Approves Latest U.S. Stimulus Measures

Asian Stocks Up After Trump Approves Latest U.S. Stimulus Measures

© Reuters.  © Reuters.

By Gina Lee

Investing.com – Asia Pacific stocks were up on Monday morning after U.S. President Donald Trump added his signature to the latest stimulus measures.

China’s Shanghai Composite was up 0.30% by 10:39 PM ET (3:39 AM GMT) and the Shenzhen Component gained 0.43%.

Alibaba Group Holding Ltd (HK:9988) shares in Hong Kong fell after the Alibaba Group Holdings Ltd ADR (NYSE:BABA) fell 13.34%, the most ever, over concerns about the State Administration for Market Regulation’s investigation into alleged monopolistic practices during the previous week. Alibaba boosted its share buyback program to $10 billion earlier in the day, after affiliate Ant Group Co. was ordered by regulators to return to its roots as a provider of payments services.

Hong Kong’s Hang Seng Index inched up 0.10%

Japan’s Nikkei 225 gained 0.59% and South Korea’s KOSPI rose 0.82%. In Australia, the ASX 200 was up 0.33%.

After tweeting, “Good news on COVID Relief Bill. Information to follow,” Trump approved a combined $2.3 trillion COVID-19 relief and government funding package. His approval of the package come after its passage in both the House of Representatives and the Senate during the previous week.

Trump’s signature on the bill averted further delays to the latest stimulus measure becoming law, bolstering some of the investor optimism that drove global shares to record levels in December.

The stimulus “could be supportive of the market, supportive of the U.S. economy,” Credit Suisse (SIX:CSGN) Group AG strategist Suresh Tantia told Bloomberg.

“Next year all the building blocks are there for markets to continue this rally,” Tantia added.

Trump had threatened to withhold his signature earlier as he demanded that stimulus checks be raised from $600 to $2,000. Congress will vote on the increased amount later in the day.

“It is positive for markets that we no longer have a chaos over stimulus, considering there was a chance of a partial government shutdown,” Sumimoto Mitsui DS Asset Management chief strategist Masahiro Ichikawa told Reuters.

“But on the other hand, markets have talked about that stimulus for a long time and I would say most of it has been already priced in,” Ichikawa added.

Across the Atlantic, the U.K. and the European Union (EU) also reached a post-Brexit trade deal before the Christmas holidays, just ahead of the year-end deadline.

Despite the optimism, the number of global COVID-19 cases continues to increase, surpassing 80.7 million as of Dec. 28, according to Johns Hopkins University data. More countries have implemented tighter curbs to fight the new, more infectious B.1.1.7 strain of COVID-19, and a second mutant strain of the virus, possibly originating from South Africa, has also been discovered.

Meanwhile, the EU began a continent-wide vaccination campaign less than a week after approving BNT162b2, the COVID-19 vaccine developed by Pfizer Inc. (NYSE:PFE) and BioNTech SE (F:22UAy).

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