Asian stocks, pound cheer Brexit

25 December, 2020 12:00 AM printer

TOKYO: Asian shares and the British pound rose on Thursday ahead of the Christmas break, as Britain and the European Union closed in on a free-trade deal and investors placed bets on global economic recovery prospects.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.14 per cent. Australian stocks advanced by 0.57 per cent, while Tokyo shares rose 0.43 per cent, report agencies.

Chinese stocks rose 0.02 per cent, but Alibaba Group Holding Ltd slumped 6.28 per cent, its biggest daily drop in six weeks, after China's market regulator said it will investigate the tech giant for suspected monopolistic behaviour.

U.S. stock futures edged up by 0.11 per cent.

Investors cheered news that Britain and the European Union were on the cusp of striking a narrow trade deal on Thursday, which would help avoid shipping and travel chaos on both sides of the English Channel.

Hopes for more fiscal spending and expectations that coronavirus vaccines will become more available next year also supported global equities.

"A pro-risk and weak dollar theme dominated markets on optimism regarding vaccines, U.S. and UK fiscal stimulus, and Brexit, with hope an agreement on the latter can be reached before Christmas," ANZ Bank analysts wrote in a research memo.

The potential for a Brexit deal boosted sterling, which rose 0.3 per cent to $1.3535. The pound held steady at 90.20 pence per euro.

The pound also drew support after France lifted its ban on freight coming from Britain, which it had enacted in response to a more contagious coronavirus variant in Britain.

MSCI's gauge of global stocks was up 0.1 per cent, but moves were subdued in thin holiday trading.

Alibaba, co-founded by Chinese billionaire Jack Ma, was the stock to watch in Asia on Thursday as Chinese authorities stepped up their campaign against big technology companies.

Separately, Ant Group, the mobile payments and consumer credit arm of Ma's tech empire, said it will comply with all regulatory requirements after China's financial watchdogs said they will conduct regulatory talks with it in the next few days.

Last month, China halted Ant Group's $37 billion dual-listing initial public offering, crushing what would have been the world's largest stock market debut.


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