Asian markets enjoy another rally | 2019-01-10 | daily-sun.com

Asian markets enjoy another rally

    9th January, 2019 10:15:04 printer

HONG KONG: Increasing optimism that China and the United States will be able to hammer out a deal to help ease their trade war provided the impetus for more gains across Asian markets on Wednesday.

After taking a battering in December and suffering a shaky start to 2019, confidence is slowly returning to equity trading floors, though dealers remain on edge, reports AFP.

Federal Reserve boss Jerome Powell provided the platform for a rally last week when he said the central bank had no “pre-set” plan for lifting interest rates and was “listening” to markets, signalling that the pace of hikes could slow this year.

Fear of higher borrowing rates was a major cause of last year’s stocks losses. The mood among dealers held this week as officials from China and the US hunkered down for trade negotiations in Beijing that have extended into a third day. US President Donald Trump on Tuesday described them as going “very well”.

Bloomberg also reported White House sources as saying Trump is keen to get a deal done in order to boost stock markets, which he regards as a gauge of his success.

And the Wall Street Journal said the two were moving in the right direction, with China ready to buy more US goods and services, while further talks at cabinet level were being lined up next week.

The progress in talks “is fuelling investor optimism suggesting there might be a light at the end of the trade war tumultuous tunnel”, said Stephen Innes, head of Asia-Pacific trade at OANDA.

Hong Kong rose 2.3 percent — a fourth straight gain that has seen the index put on around five percent — and Shanghai ended up 0.7 percent, while Tokyo closed 1.1 percent higher.

Sydney jumped one percent with Singapore, while Taipei and Wellington were each more than one percent higher. Manila surged more than two percent and there were also gains in Mumbai and Jakarta.

Seoul added two percent as North Korean leader Kim Jong Un visited Beijing with speculation swirling that he will meet Trump for a second summit later this year.

In early European trade, London rose 0.9 percent, Paris gained 0.8 percent and Frankfurt added 0.7 percent.

The gains also come after a strong reading on US jobs creation Friday, which soothed worries that the American economy was slowing down, and ahead of the corporate earnings season.

“When the dust settles, if it ever does, the fear of recession will prove to be premature,” Bob Doll, an analyst at Nuveen Asset Management, told Bloomberg TV.

“We will have growth, yes, slowed from the 2018 pace and we will have… earnings, yes, slowed from the 2018 pace, but acceptable for investors and that will allow equity markets to move higher.”

There was little reaction to the World Bank’s decision to cut its growth forecasts for the global economy this year and next, citing the trade row.


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