GLOBAL MARKETS-Asian markets buoyant as U.S. stimulus package debate looms

* China shares rise as liquidity, virus worries ease
* South Korea index hits one-week high on stimulus round
* Biden set to debate Republicans on stimulus package
* Silver price falls further as investors lock in gains

By Kane Wu
Feb 2 (Reuters) - Asian stock markets gained for a second
day on Tuesday on increased optimism about economic stimulus and
global recovery, while retail investors retreated from GameStop
and their new-found interest in silver.
The momentum looked set to carry through into European
trade, with FTSE futures FFIc1 up 0.66% and E-mini futures for
the S&P 500 index ESc1 rising 0.52%.
MSCI's gauge of Asia Pacific stocks outside Japan
.MIAPJ0000PUS rose 1.49%, building on Monday's 2.3% gain. Hong
Kong's Hang Seng Index .HSI and China's benchmark CSI300 Index
.CSI300 jumped 1.37% and 1.1% respectively, helped by easing
concerns about tight liquidity and falling cases of new
coronavirus infections. Japan's Nikkei 225 .N225 added 0.78%.
Markets were buoyant ahead of negotiations Tuesday between
U.S. 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 U.S. stimulus story continues to be the half glass,
which markets are happy to interpret as half full," said Vishnu
Varathan, head of economics in Asia at Mizhuo Bank in Singapore.
"The improved sentiment also derived from the fact that
vaccinations hit the milestone within the U.S. of more
vaccinations than infections and I think there's a sense that
the rollout program remains quite optimistic and encouraging,"
he said.
The dollar hovered near a seven-week high, benefiting from a
euro selloff overnight after coronavirus lockdowns choked
consumer spending in Germany, and on short-covering in
over-crowded dollar-selling positions. Australia's S&P/ASX 200 benchmark .AXJO extended gains, up
1.49% after its central bank held rates at near-zero in a widely
expected decision on Tuesday.
The Reserve Bank of Australia's pledge to buy more bonds saw
yields on 10-year paper AU10YT=TWEB drop back to 1.08%, after
touching a 10-month top of 1.19% early in the session.
South Korea's KOSPI .KS11 jumped as much as 2.7% to a
one-week high, lifted by chipmakers and foreign buying, 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 boosted GameStop Corp and other so-called
meme stocks in recent sessions against their financial
fundamentals but have made cautious moves to protect their
positions.
Spot silver prices XAG= fell nearly 2% on Tuesday, as
investors locked in profits after the precious metal touched a
near eight-year peak in the previous session driven by retail
investors.
Spot gold XAU= also fell 0.3% Tuesday to $1,854.56 per
ounce. U.S. gold futures GCc1 slumped 0.34% to settle at
$1,854.5 per ounce.
Brent crude LCOc1 was up 0.98% at $56.90 a barrel. U.S.
crude CLc1 gained 1.06% to $54.12 as falling inventories and
rising fuel demand due to a massive snow storm in the Northeast
United States propped up prices.

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