Asian markets were mostly higher Monday as US President Donald Trump signed a massive coronavirus relief bill, boosting positive sentiment despite ongoing concern over a new strain of Covid-19.
Under pressure from all sides, Trump signed the stimulus bill worth $900 billion late Sunday in the United States, having delayed doing so for nearly a week.
Before signing the bill, the president tweeted that he had “good news” to come — sending markets swinging higher even before the measures were approved.
“For Americans that have been endlessly checking their mailboxes for a stimulus check, this is the best holiday present anyone could ask for,” said Axi strategist Stephen Innes.
“Similarly, the stimulus balloon will allow the markets to navigate better the number of new air pockets… due to the virus’s latest variant,” he added.
But with various lockdown measures still in place worldwide due to the new strain, “vaccine rollout remains the key to unlocking the ultimate rally door”, Innes warned.
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 was back in positive territory on Monday as investors bought back shares, buoyed by the US stimulus bill, while Hong Kong and Shanghai were also higher.
But analysts in Tokyo said investors remained cautious after Japan reported its first cases of the new strain and closed its borders to all new non-resident foreign arrivals from overseas until late January.
– US shutdown avoided –
Seoul, Singapore, Jakarta and Bangkok were also up less than one percent, although Manila was down 0.9 percent. Sydney and Wellington were 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 Tuesday.
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.
“I am signing this bill to restore unemployment benefits, stop evictions, provide rental assistance… return our airline workers back to work, add substantially more money for vaccine distribution, and much more,” said Trump, who is on Christmas vacation at his Mar-a-Lago resort in Florida.
The approval and roll-out of vaccines has also boosted hopes that 2021 could bring a respite from the pandemic, which has killed more than 1.7 million people since emerging in China late last year.
But jitters remain over the new strain that emerged in Britain and reached several other European countries such as France and Sweden, as well as Japan, which on Friday said five people — all of whom had come from Britain — were confirmed infected with the new variant.
The new strain, which experts fear is more contagious, has prompted more than 50 countries to impose travel restrictions on the UK.