Asian equities on Friday rose as investors, still buoyed by a China-US trade deal, turned their focus to earnings season and the global outlook, while they were also cheered by data indicating that China’s economy appears to be stabilizing.
Apart from last week’s blip caused by the US assassination of a top Iranian general, markets have enjoyed a strong start to the new decade, building on a rally late last year.
The gains have been fanned by the “phase one” trade agreement, as well as signs of improvement in worldwide economies, lower interest rates, government stimulus and easing Brexit concerns.
With the prospect of a healthy batch of company reports, there are hopes for further advances.
“It’s very hard to be bearish here,” Federated Investors Management senior equity strategist Linda Duessel told Bloomberg TV.
“We could have really good earnings surprises to the upside” as more profit reports roll in, she said.
All three main indices on Wall Street on Thursday ended at record highs, boosted by the US Senate’s approval of a new North American free-trade deal, while Google parent Alphabet Inc joined Apple Inc and Microsoft Corp to become a trillion-dollar firm for the first time.
The positive energy funneled through to Asia, where most markets ended broadly up.
In Taipei, the TAIEX on Friday closed up 23.36 points, or 0.2 percent, at 12,090.29, rising 0.5 percent from a close of 12,024.65 a week earlier. Turnover totaled NT$131.27 billion (US$4.38 billion).
In Hong Kong, the Hang Seng on Friday gained 173.38 points, or 0.6 percent, to 29,056.42, surging 1.5 percent from a close of 28,638.20 on Jan. 10.
Tokyo’s Nikkei 225 on Friday rose 108.13 points, or 0.5 percent, at 24,041.26, a jump of 0.8 percent from 23,850.57 a week earlier.
The Shanghai Composite on Friday edged up 1.41 points, or 0.1 percent, to 3,075.50, but slid 0.5 percent from 3,092.2 on Jan. 10.
Seoul’s KOSPI on Friday rose 2.52 points, or 0.1 percent, to 2,250.57, surging 2 percent from 2,206.39 a week earlier.
Sydney added 0.3 percent, with Mumbai, Bangkok, Wellington and Manila also well up.
Beijing added to the mood, releasing data showing that the world’s No. 2 economy expanded 6.1 percent last year.
While that was the slowest pace in three decades and well down from 6.6 percent in 2018, it was in line with expectations and the government’s target.
The 6 percent growth for the October-to-December quarter was the same as the previous quarter, while traders were also cheered by figures showing a better-than-forecast rise in retail sales, industrial output and investment.
The slowdown in growth in China has been a major headache for investors over the past few years, as the country’s leaders struggle with the US trade war, slowing global demand and a worrying debt mountain.
Still, while there is hope that this year could see healthy advances for equities, some doubt remains.
Progress on the next round of US-China talks “will continue to hog the limelight in 2020,” said AxiTrader chief Asia market strategist Stephen Innes, who added that “trade discussions between the US and the EU remain open-ended, while the commencement of bilateral EU and the UK trade discussions could get thorny.”
“But perhaps the real elephant in the room, the US [presidential] election in November, will also increasingly preoccupy investors as we move through the year,” he said.
Additional reporting by staff writer
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