Brexit Deal, Trade Talks Help HSI Extend Rally

Hong Kong and mainland stock markets rose again on Tuesday, extending a recovery from last week's sharp losses as investors welcomed news that Britain and European Union had agreed a revised Brexit deal.

The Hang Seng Index in Hong Kong jumped 1.4 percent, to close at 28,920.

The benchmark Shanghai Composite Index climbed 1.1 percent, to 3,060 and the Shenzhen Composite Index added 1.7 percent, to 1,695.

Tokyo's benchmark Nikkei index leapt nearly 1.8 percent on Tuesday as concerns over the US economy also receded.

Singapore jumped 0.8 percent and Seoul and Taipei each added 0.9 percent, with Manila putting on 0.5 percent.

Dealers are keeping tabs on developments in the China-US trade talks, with top officials holding phone talks on Tuesday to discuss the next steps, though the White House said no date has been set for a summit at which a final deal can be signed.

The pound extended its rally in Asian trade on Tuesday after British Prime Minister Theresa May hammered out a revision to her controversial Brexit deal.

"From today for three days the market will be closely watching the UK lower house votes over Brexit," Mizuho Securities said in a note.

The main scenario is that the Tuesday vote will be denied, the Wednesday vote will approve avoiding a hard exit, and the Thursday vote will decide the extension until the end of June, it said.

"If the extension is pushed back to December 2019 or later, that would be favoured by the market with possibility of the second referendum that may deny Brexit," it said.

The pound has risen about 1.5 percent against the dollar since late Friday, while it is up around two percent on the euro. It was trading at HK$10.38 by Tuesday evening. (AFP)