Asian markets were mixed on December 28 as US President Donald Trump signed a massive coronavirus relief bill, with a boost in positive sentiment dampened by concern over a new strain of Covid-19.
Under pressure from all sides, Trump approved the stimulus package worth $900 billion late on December 28 in the US, having delayed doing so for nearly a week.
OANDA senior market analyst Jeffrey Halley said after the signing: “An otherwise quiet day in Asia has sparked to life.
“The headline should provide a welcome boost to sentiment in Asia, which was likely to waver today as Chinese authorities over the weekend told Ant Financial to go back to its core payments business.”
Before signing the bill, Trump tweeted that he had “good news” to come, sending markets swinging higher even before the measures were approved.
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 Britain, forcing governments to impose tight restrictions and lockdowns to contain the disease over the festive period.
Tokyo closed 0.7 per cent higher on December 28, with Jakarta, Mumbai and Bangkok also in positive territory.
Shanghai, Seoul and Singapore were flat, while Hong Kong closed down 0.3 per cent and Manila slid 1.1 per cent.
Sydney and Wellington were closed for a holiday.
European stock markets opened firmer. Paris was up 0.7 per cent and Frankfurt rose 1.3 per cent, with dealers citing the Brexit trade deal as a major positive for Europe’s biggest economy and trade powerhouse. London was closed for a holiday.
The emergency US package is part of a larger spending bill that, with Trump’s signature, will avoid a government shutdown on December 29.
The president’s turnaround came after a day marked by calls from across the political spectrum for action to avert a financial and social disaster in the world’s largest economy, especially among the most vulnerable.
Axi strategist Stephen Innes said: “For Americans that have been endlessly checking their mailboxes for a stimulus check, this is the best holiday present anyone could ask for . . . The stimulus balloon will allow the markets to navigate better the number of new air pockets . . . due to the virus’ latest variant.”
But with various lockdown measures in place worldwide due to the new strain, “vaccine rollout remains the key to unlocking the ultimate rally door”, Innes warned.
The approval and roll-out of vaccines has boosted hopes that 2021 could bring a respite from the pandemic, which has killed more than 1.7 million people since emerging late last year.
But jitters remain over the new strain that emerged in Britain and reached several other European countries as well as South Korea and Japan.
Analysts in Tokyo said investors remained cautious after Japan reported its first cases of the new strain and closed its borders to all non-resident foreign arrivals until late in January.
Over the weekend China’s central bank summoned executives from Ant Group and demanded the fintech giant “strictly rectify” its lending, insurance and wealth management services, as the state squeeze continues on the once unbridled empire of tech tycoon Jack Ma.