* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* S&P 500 futures dip, U.S. relief bill agreed
* New strain of coronavirus shuts much of UK
* Pound slides, Brexit talks drag on with no deal
By Wayne Cole
SYDNEY, Dec 21 (Reuters) - Asian stocks faltered and
sterling slid on Monday as unease over a new coronavirus strain
that was shutting much of the United Kingdom offset news that a
deal had finally been struck on a long-awaited U.S. stimulus
bill.
The pound sank 1.2% to $1.3352 GBP=D3 after several
European countries closed their borders to the UK as the country
entered a tougher lockdown to fight a new strain of coronavirus.
Prime Minister Boris Johnson will chair an emergency
response meeting on Monday to discuss international travel and
the flow of freight in and out of Britain. That combined with the lack of a Brexit deal to slice 1.1%
off FTSE futures FFIc1 , while EUROSTOXX 50 futures STXEc1
shed 1.7%.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS dipped 0.2% after hitting a string of record
peaks last week. Japan's Nikkei .N225 reversed early gains to
be down 0.4%, off its highest since April 1991.
In the United States, Republican U.S. Senate Majority Leader
Mitch McConnell said an agreement had been reached by
congressional leaders on a roughly $900 billion COVID-19 relief
bill. The news saw futures for the S&P 500 ESc1 jump at first,
only to fade to a loss of 0.2% as the session progressed.
Analysts at BofA noted a huge $46.4 billion flowed into
equities in the latest week, while the outflow from cash was the
largest in four months. There were record flows into tech shares
and large flows to the consumer sector, healthcare, financials,
real estate and value stocks.
BofA chief investment strategist Michael Hartnett said a
"sell signal" had been triggered for the first time since
February as cash levels declined to 4.0% in the latest Global
Fund Manager Survey.
"Positioning is getting over-extended as policy support and
profits are peaking," he said in a note. "Expectations for
higher growth, inflation and lower interest rates have become
consensus and investors are positioning for a very rosy scenario
of low volatility and high growth."
A CROWDED TRADE
Another popular trade has been shorting the U.S. dollar and
again positioning was looking over-extended by many measures,
giving the currency some respite on Monday.
"FX markets await final outcomes of a possible Brexit deal
and U.S. fiscal package," said Ned Rumpeltin, European head of
FX strategy at TD Securities.
"We remain biased to fade any 'good news' kneejerk
USD-selling on both fronts, however. These factors look fully
priced and the short-USD trade appears increasingly crowded."
The dollar index =USD firmed to 90.453 and away from last
week's trough of 89.723, which had been the lowest since April
2018.
The euro likewise edged back to $1.2190 EUR= , while the
dollar was steady on the yen at 103.36 JPY= .
The dollar also found support from a Nikkei report that
Japanese Prime Minister Yoshihide Suga told Finance Ministry
officials in November to make sure the dollar did not fall below
100 yen. The general risk-off mood saw gold prices gain 0.8% to
$1,895 an ounce XAU= . GOL/
Oil prices ran into profit-taking after notching up seven
straight weeks of gains, with travel restrictions in Europe a
further blow to demand. O/R
U.S. crude CLc1 fell $1.57 to $47.53 a barrel, while Brent
crude LCOc1 futures dropped $1.65 to $50.61.
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Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
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(Editing by Sam Holmes and Kenneth Maxwell)