Equities advance as US shutdown ends

The pound broke the $1.40 level for the first time since Britain voted to leave the European Union in 2016

Most stock markets around the world pushed higher Tuesday on investor relief over the end of the US government shutdown, dealers said.

"A resolution to the US government shutdown has helped boost Asian and European indices," said IG analyst Joshua Mahony.

"However, with a short-term solution in place, we will be back in the same position in weeks."

Democrats on Monday agreed to a Republican deal that brought an end to the three-day federal shutdown -- the first since 2013.

The agreement, which keeps the government running until February 8, gave an extra nudge to Wall Street's three main indices on Monday, which all set new records by the end of trade.

They continued to push higher in trading on Tuesday, led by Netflix, which climbed more than 10 percent thanks to results reported late on Monday.

"The market capitalisation of Netflix has surpassed the $100 billion mark after the company added 8.33 million new users in the fourth quarter –- which was a record for the company," said market analyst David Madden at CMC Markets UK.

"Not only was the previous quarter robust, but the guidance for the first quarter is bullish too."

Most major European bourses gained ground after Asia extended a new year rally on continued optimism about the upcoming earnings season.

Frankfurt's DAX 30 struck a record high after a key survey showed surging German investor confidence in January.

The ZEW institute's monthly index of financial players' economic expectations added 3.0 points to 20.4, a much sharper gain than the 0.5-point increase forecast by analysts.

Equity markets remain upbeat, brokers say, despite having surged in recent weeks on the back of a robust global economy, on hopes for strong corporate profits and expectations of a positive hit from Donald Trump's tax cuts.

Sentiment was bolstered by a report from the International Monetary Fund raising its world growth outlook and predicting at least a short-term boost from the president's fiscal policy.

- Strong yen fear -

On Tuesday, Hong Kong continued to hit new records, surging 1.7 percent, while Tokyo finished 1.3 percent up at a 26-year high.

Shanghai climbed 1.3 percent and Seoul jumped 1.4 percent.

The yen edged down against the dollar after the Bank of Japan offered no new guidance on its plans for monetary policy after earlier this month easing back on its bond-buying stimulus.

While no moves were expected from the central bank, there had been hopes the board would provide some forward guidance as it edges away from its easy-money crisis-era policies to move in line with the Federal Reserve.

However, the dollar is struggling to bounce back against the euro as the European Central Bank considers its own tightening, while Germany is on course to end months of uncertainty and form a new government.

Meanwhile, the pound topped $1.40 for the first time since Britain voted to leave the European Union in June 2016.

"A renewed sense of optimism over the Brexit negotiations pushed sterling above 1.40 during Tuesday’s trading session," said Lukman Otunuga, a research analyst at FXTM online brokerage firm.

"While the lion’s share of sterling’s gains this year can be attributed to ongoing dollar weakness, the gains could partially be due to the renewed hopes of a 'soft Brexit'" that leaves Britain with access to the EU market, he said.

- Key figures around 1630 GMT -

London - FTSE 100: UP 0.2 percent at 7,731.83 points (close)

Frankfurt - DAX 30: UP 0.7 percent at 13,559.60 (close)

Paris - CAC 40: DOWN 0.1 percent at 5,535.26 (close)

EURO STOXX 50: UP 0.1 percent at 3,669.88

New York - DOW: UP 0.04 percent at 26,224.35

Tokyo - Nikkei 225: UP 1.3 percent at 24,124.15 (close)

Hong Kong - Hang Seng: UP 1.7 percent at 32,930.70 (close)

Shanghai - Composite: UP 1.3 percent at 3,546.50 (close)

Euro/dollar: UP at $1.2277 from $1.2263 at 2200 GMT

Pound/dollar: DOWN at $1.3978 from $1.3987

Dollar/yen: DOWN at 110.37 yen from 110.92 yen

Oil - Brent North Sea: UP $1.10 at $70.13 per barrel

Oil - West Texas Intermediate: UP $1.02 at $64.59