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|Labour leader Jeremy Corbyn has been asked by Theresa May to work with her on breaking an impasse in parliament just over a week before Britain is meant to be leaving the European Union. (Photo: AFP/Stefan Rousseau)|
The pound extended gains after British Prime Minister Theresa May said she would look for another Brexit delay and softened her position on the issue to avert a calamitous no-deal divorce from the European Union.
While Wall Street provided a flat lead, Asian investors built on recent gains, with optimism given an extra boost by a report in the Financial Times saying Beijing and Washington were on course for a historic agreement.
Expectations that the world's top two economies will eventually sign a deal has been a key driver of a global equities rally this year and the FT article adds to the general sense of hope.
It comes after better-than-expected factory data out of China and the US that eased worries about growth in the global economy, while a dovish turn from central banks has also provided support.
"Recent positives such as the US Federal Reserve pausing their interest rate increases, incremental signs of progress on China-US trade negotiations and a dovish bias from China's (central bank) to support growth have given investors a sunnier attitude about risk assets," Tai Hui, chief market strategist for Asia Pacific at JP Morgan Asset Management, said.
Hong Kong jumped more than one per cent - having risen for six straight days - Shanghai climbed 1.2 per cent and Tokyo was one per cent higher.
Sydney gained 0.7 per cent, while Seoul rose 1.2 per cent and Singapore piled on 1.0 per cent, with Taipei, Manila, Mumbai and Bangkok also higher.
In early European trade London was flat, Paris added 0.7 per cent and Frankfurt gained 0.9 per cent.
MAY'S BREXIT GAMBLE
The pound extended on Tuesday's jump after May, who is struggling to get her Brexit agreement through parliament, said she would request a second delay to the Apr 12 divorce day that is "as short as possible and which ends when we pass a deal".
She also said she would work with the leader of the opposition Labour Party, Jeremy Corbyn, who favours closer ties with the European Union, indicating she is willing to take a softer Brexit than she had hoped.
The news cheered investors who fear the impact of a no-deal exit on the economy.
However, there remains a lot of uncertainty as May's decision to work with Corbyn fuelled anger among hardline Brexiters in her own party.
"There are still lots of questions what the next steps are, given that the EU has said that the withdrawal agreement is not negotiable, and are only willing to offer an extension on the basis that it leads to a clear outcome," warned OANDA senior market analyst Alfonso Esparza.
"Joining Labour could be the first step towards that clarity, but with so many factions remaining it will not be an easy task."
Oil prices also continued to rise, with both main contracts around five-month highs, on hopes for an easing of China-US trade tensions, upbeat economic data and signs that OPEC and Russia are sticking to their agreed output cuts.
Added to that is the political and economic crisis in Venezuela, where "output has virtually collapsed as power cuts have removed critical oil export facilities from the grid", said Stephen Innes at SPI Asset Management.
- Key figures around 0810 GMT -
Tokyo - Nikkei 225: UP 1.0 per cent at 21,713.21 (close)
Hong Kong - Hang Seng: UP 1.2 per cent at 29,986.39 (close)
Shanghai - Composite: UP 1.2 per cent at 3,216.30 (close)
London - FTSE 100: FLAT at 7,390.17
Pound/dollar: UP at US$1.3186 from US$1.3137 at 2040 GMT
Euro/pound: UP at 85.23 pence from 85.27 pence
Euro/dollar: UP at US$1.1238 from US$1.1202
Dollar/yen: UP at ¥111.52 from ¥111.36
Oil - West Texas Intermediate: UP 21 cents at US$62.79 per barrel
Oil - Brent Crude: UP 47 cents at US$69.84 per barrel
New York - Dow: DOWN 0.3 per cent at 26,179.13 (close)