ICEC

Asian shares rise on U.S. tax cut hopes; China in focus

Asian shares edged up on Monday, with sentiment boosted by expectations U.S. lawmakers will pass a long-awaited tax bill this week, while Chinese stocks were soggy on concerns about liquidity and tighter regulations in the world’s second largest economy.

Meanwhile, the launch of bitcoin futures on the CME exchange bolstered expectations the cryptocurrency’s red-hot rally in the cash market could continue, although their trading debut was tepid.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.4 percent. Japan’s Nikkei .N225 was the best performer in the region, rising 1.6 percent to edge closer to a 25-year peak of 23,382 points set last month.

European and U.S. stocks are also expected to have a solid start to the week. The near-month FTSE futures contract FFIc1 and the e-mini S&P futures ESc1 were each up 0.2 percent. Dow futures 1YMc1 rose 0.4 percent.

Global stock markets have surged this year, largely led by expectations of a U.S. tax overhaul. The reform is seen boosting corporate profits, triggering share buybacks and higher dividend payouts – a boon for shareholders.

Votes on the legislation are expected this week.

But the mood was dour in Asia’s biggest economy where the People’s Bank of China increased rates on reverse repurchase agreements, or reverse repos, triggering concerns about tight year-end liquidity.

Meanwhile, the launch of bitcoin futures on the CME exchange bolstered expectations the cryptocurrency’s red-hot rally in the cash market could continue, although their trading debut was tepid.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.4 percent. Japan’s Nikkei .N225 was the best performer in the region, rising 1.6 percent to edge closer to a 25-year peak of 23,382 points set last month.

European and U.S. stocks are also expected to have a solid start to the week. The near-month FTSE futures contract FFIc1 and the e-mini S&P futures ESc1 were each up 0.2 percent. Dow futures 1YMc1 rose 0.4 percent.

Global stock markets have surged this year, largely led by expectations of a U.S. tax overhaul. The reform is seen boosting corporate profits, triggering share buybacks and higher dividend payouts – a boon for shareholders.

Votes on the legislation are expected this week.

But the mood was dour in Asia’s biggest economy where the People’s Bank of China increased rates on reverse repurchase agreements, or reverse repos, triggering concerns about tight year-end liquidity.

“The introduction (of futures contracts) has added validity, acknowledging bitcoin as a legitimate asset,” said Shane Chanel, a fund manager at ASR Wealth Advisers.

“The launch should increase buy-side pressure and potentially be the catalyst that pushes bitcoin above $20,000.”

In currencies, the U.S. dollar stayed above a 1-1/2 week trough against the Japanese yen, after slipping 0.8 percent last week. 

Trading was generally thin as investors wound up their books ahead of Christmas holidays.

The British pound inched up but was still near 3-week lows as Prime Minister Theresa May prepared for a week of difficult meetings in an effort to unite a divided cabinet over Brexit talks.

In commodities, oil prices were slightly firmer with U.S. crude CLc1 up 30 cents at $57.60 while Brent crude LCOc1 rose 28 cents to $63.50.

Source: Reuters

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