Hong Kong stocks yesterday broke the 30,000 mark for the first time in 10 years as Asian markets extended a global rally following another record close on Wall Street.
After retreating for most of this month, investors were back in buying mood this week on optimism about the world economy and earnings, while they remain upbeat that US lawmakers will eventually push through much-vaunted tax cuts.
All three main indices in New York City closed at all-time highs once again as dealers there began to wind down for the Thanksgiving holiday today.
Photo: Bloomberg
Tech firms were the big winners, with top titans including Apple Inc, Amazon.com Ince, Facebook Inc and Google parent Alphabet Inc firming more than 1 percent.
The positive energy flowed through to Asia, where Hong Kong ploughed 0.8 percent higher in the afternoon, sitting above the 30,000 barrier for the first time since late 2007.
The Hang Seng Index (HSI) has soared by a third this year, boosted by Tencent Holdings Ltd (騰訊), which has doubled in value in that period — helping the Internet giant surpass half a trillion dollars in market capitalization and overtaking Facebook.
The Hang Seng China Enterprises index rose 0.71 percent to 11,958.63.
The sub-index of the HSI tracking energy shares rose 1.5 percent, while the IT sector dipped 0.41 percent, the financial sector was 0.9 percent higher and the property sector rose 0.54 percent.
The HSI is less than 2,000 points off its record high seen in October 2007, and Kevin Tam (譚思晉), deputy head of research at Core Pacific Yamaichi in Hong Kong, said: “I do not see any reason it cannot break the record. Currently the uptrend is quite solid.”
Regarding Tencent’s rally, he added: “It’s likely sustainable because Tencent will book financial gains in the fourth quarter.”
He said gains from the listing of Tencent’s e-book spin-off China Literature Ltd (閱文集團) will be included for that quarter.
China Literature almost doubled in value on its debut earlier this month.
Across the rest of Asia investors were buoyant, sending Tokyo jumping 0.5 percent, Shanghai 0.6 percent up and Sydney 0.4 percent higher. Seoul, Singapore and Taipei each rose 0.4 percent, while Jakarta and Wellington were also well up.
“When thinking about the year ahead it does seem to me that given where growth is, where central banks are, where inflation is, and even with many tight labor markets around the world, the best course is to extrapolate this year’s trends into the future,” AxiTrader chief market strategist Greg McKenna said.
“At least until there is a material piece of information that changes,” he added.
World markets had taken a step back on concerns that US President Donald Trump’s tax reform legislation could fall flat as US lawmakers struggle to agree a joint deal.
However, with Republicans continuing to work on a plan that can pass before Christmas, analysts said there remains hope for a breakthrough.
Goldman Sachs has hiked its outlook for US markets next year, saying strong economic growth and tax reform would fire earnings.
“The earnings picture is dominant and that’s of course what has, and will continue, to move markets,” Bob Doll, chief equity strategist at Nuveen Asset Management, told Bloomberg TV. “Icing on the cake is the tax bill and that does boost earnings, but a lot of people are already baking that into their assumption.”
Additional reporting by Reuters
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