Tue, Jan 01, 2019 - Page 10 News List

Hong Kong ends tough year higher on trade tweet

TRUE PROGRESS?’Deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas and points of dispute,’ the US president tweeted on Saturday

AFP, HONG KONG

Hong Kong ended a difficult year on a positive note yesterday, with the Hang Seng index posting strong gains after US President Donald Trump hailed “big progress” on resolving Washington’s trade dispute with Beijing.

“Just had a long and very good call with President Xi [Jinping (習近平)] of China,” Trump tweeted on Saturday. “Deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas and points of dispute. Big progress being made!”

In light holiday trading with markets in Tokyo and Shanghai closed, stocks in the Chinese financial hub were buoyed by Trump’s upbeat assessment on prospects for ending the tariff conflict between the world’s two biggest economies, which has rattled markets globally.

Analysts welcomed the apparent progress, following a torrid time for equities, which have also been unnerved by fears over slowing global growth, a partial US government shutdown, the US Federal Reserve’s interest rate increases and Trump’s attacks on the US Federal Reserve.

“It’s a positive development,” Bank of America Merrill Lynch economics and rates strategy head Tony Morriss said in an interview. “What we’d like to see now is the market pricing out any further action from the Fed, the stock markets stabilizing and focusing on some positive headlines on trade.”

Key Asian markets limped toward the end of last year in bear market territory, with Tokyo’s benchmark Nikkei index rounding out the year with its first annual loss since 2011 and Shanghai becoming the worst-performing major stock market in the world.

Australian shares reversed gains as positive sentiment dampened after a gauge of China’s manufacturing industry missed estimates and declined last month. Overall, global stocks had their worst year since 2008.

However, the Hang Seng index yesterday shrugged off disappointing Chinese manufacturing purchasing managers’ index data to end a shortened trading day up more than 1 percent. Sydney closed marginally lower, while markets in Taiwan, Indonesia, the Philippines and South Korea were also closed for a holiday.

In commodities markets, oil chalked up gains on renewed US-China trade optimism.

However, both oil benchmarks have lost about 40 percent of their value from four-year peaks in early October and are expected to continue struggling, hobbled by a supply glut and a slowing global economy.

“The effects of rising inventories and an economic gloom for the near future have exacerbated bearish influences in oil prices,” Phillip Futures commodities analyst Benjamin Lu said.

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