Global equity markets could gain further traction in the second half of the year, led by the world’s two largest economies, as evidenced by their positive economic data, analysts said yesterday.
Advanced economies have taken a backseat in performance compared with emerging markets, but gained the upper hand this quarter and could continue to be the bright spots moving forward, Allianz Global Investors Taiwan Ltd (安聯投信) portfolio manager Karen Chuang (莊凱倫), told a news conference in Taipei.
Technology-heavy bellwethers NASDAQ and the PHLX Semiconductor Sector have gained 10 percent this year, while the Russell 1000 Index has picked up 8 percent, Chuang said, adding that the trend would likely continue in light of healthy purchasing managers’ activity and other economic data.
Pullbacks on Wall Street and in mature markets elsewhere present an opportunity for bargain hunting, she added.
The meeting scheduled for next week between US President Donald Trump and North Korean leader Kim Jong-un would lend support to US equities, as would the US’ mid-term congressional elections to be held in November, Chuang said.
GDP growth in the US could reach 2.8 percent this year, from 2.5 percent last year, on the back of better private investment and consumer spending, Allianz said, citing international research bodies.
The landscape bodes well for US corporate earnings, which could advance 22.2 percent this year and 10.1 percent next year, Chuang said.
Meanwhile, Asian shares remain attractive as they could extend their year-long uptick, said Timothy Orchard, Fidelity International’s chief investment officer on Asia Pacific except for Japan.
Asian shares could continue to be a decent investment, as their price-to-earnings ratio and net worth have moved toward their long-term average levels, Orchard said.
The positive growth momentum for Asian shares could continue in the second half of the year in the absence of a major global crisis, Orchard said.
From the end of last year, the TAIEX yesterday climbed 5.72 percent, or 608.89 points, and daily turnover increased to NT$187.69 billion (US$6.31 billion) from NT$140 billion, Taiwan Stock Exchange data showed.
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