Asian markets extend gains as sentiment improves on outlook

Asian stock markets extended gains on Tuesday on increased optimism about stimulus packages and global economic recovery, while retail investors retreated from GameStop and their new-found interest in silver.

MSCI's gauge of Asia Pacific stocks outside Japan was up 1.25% mid-morning, building on Monday's rise. Hong Kong's Hang Seng Index and China's benchmark CSI300 Index opened 1.7% and 0.33% higher, respectively. Japan's Nikkei 225 gained 0.67%.

Markets were buoyant ahead of negotiations Tuesday between US President Joe Biden and Republican senators on a new Covid support bill. The GOP's $618bn stimulus plan released early Monday was about a third the size of the President's proposal. Top Democrats later on Monday filed a joint $1.9 trillion budget measure in a step toward bypassing Republicans.

"The debate (around the stimulus package) will be really interesting. Markets will follow it," said Kyle Rodda, market analyst at IG. "(but) markets have been pricing in that a stimulus pacakge will be put in place in the future."

Australia's S&P/ASX 200 benchmark added a further 1.23%, as the country's central bank is expected to maintain its current policy setting when it releases the results of its Tuesday board meeting at 3:30am GMT.

South Korea's KOSPI also gained, adding 2.3%, as the country's ruling party readies another round of Covid-19 cash handouts and an extra budget.

Institutional investors are still digesting the retail trading frenzy that has boosted GameStop Corp and other so-called meme stocks in recent sessions against their financial fundamentals.

Spot silver prices eased on Tuesday, falling more than 1% to $28.30 in early trade, as some of the feverish retail-trader driven interest in the precious metal cooled.

On Monday, amateur investors who have been organizing on social media sites like Reddit and Twitter, set their sights on silver, driving up mining stocks around the world and sending precious metals dealers scrambling for bars and coins to meet demand.

Spot gold rose 0.12% to $1,862.36 per ounce Tuesday. US gold futures fell 0.04% to settle at $1,860.1 per ounce.

Brent crude was up 0.75% at $56.77 a barrel. US crude recorded the same gain to $53.96 on Tuesday morning as falling inventories and rising fuel demand due to a massive snow storm in the Northeast United States propped up prices.