Stocks, British pound get Brexit lift, Alibaba hit by China probe

Asian shares and the British pound rose on Thursday ahead of the Christmas break, as the United Kingdom 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 0.45 percent. Australian stocks ended 0.33 percent higher, while Tokyo shares rose 0.45 percent.

Chinese stocks fell 0.28 percent.

Alibaba Group Holding Ltd shares slumped 8.13 percent, its biggest daily drop in six weeks, after China’s market regulator said it will investigate the tech giant for suspected monopolistic behaviour.

United States stock futures edged up by 0.16 percent.

FTSE futures were up 0.56 percent. Euro Stoxx 50 futures were up 1.15 percent, while German DAX futures rose 1.28 percent, pointing to a bright start to the European session.

Investors cheered news that the UK and the EU were on the cusp of striking a narrowly focused trade deal on Thursday that would help them avoid a turbulent economic rupture on New Year’s Day.

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, US 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 0.47 percent to $1.3558. The pound edged up to 90.05 pence per euro.

The pound also drew support after France lifted its ban on freight coming from the UK, which it had enacted in response to a more contagious coronavirus variant in the UK.MSCI’s gauge of global stocks was up 0.12 percent, but moves were subdued in thin holiday trading.

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