BCN-05,06 Hong Kong rounds out worst year since 2011 with gains

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BCN-05

ASIA-MARKETS

Hong Kong rounds out worst year since 2011 with gains

HONG KONG, Dec 31, 2018 (BSS/AFP) – Hong Kong headed for a positive end to
a tough year Monday, with the Hang Seng rising after US President Donald
Trump hailed “big progress” on resolving Washington’s trade war with Beijing.

In light holiday trading with Tokyo and Shanghai closed, stocks in the
south China 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.

“Just had a long and very good call with President Xi of China,” Trump
said on Twitter.

“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!”

Washington and Beijing imposed tit-for-tat tariffs on more than $300
billion worth of goods in total two-way trade earlier this year, locking them
in a conflict that has begun to eat into profits and contributed to stock
market plunges.

While investors remain concerned, relations have thawed since Chinese
President Xi Jinping and Trump agreed to a 90-day trade truce in early
December while the two sides work to ease trade tensions by March 1.

Chinese state news agency Xinhua quoted Xi as telling Trump the leaders of
both the United States and China want “stable progress” in ties.
“China attaches great importance to the development of bilateral
relations,” Xi added.
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, US Federal Reserve interest rates hikes and
Trump’s attacks on the central bank.

“It’s a positive development,” Tony Morriss, Bank of America Merrill Lynch
head of economics and rates strategy, said in a Bloomberg TV interview.

“What we’d like to see now is the market pricing out any further action
from the Fed, the stock markets stabilising and focusing on some positive
headlines on trade.”

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BCN-06

ASIA-MARKETS 2 LAST HONG KONG

– ‘Very few safe havens’ –

Key Asian markets have limped towards the end of the year in bear market
territory, with Tokyo’s benchmark Nikkei index rounding out 2018 with its
first annual loss since 2011 and Shanghai becoming the worst-performing major
stock market in the world.

Overall, global stocks are set for their worst year since 2008 and both
oil benchmarks have lost around 40 percent of their value from four-year
peaks reached in early October.

“There were very few safe havens which worked this year,” said Jason Low,
senior investment strategist with DBS Group Holdings’s wealth-management
unit.

But the Hang Seng — which is set to record its worst year since 2011 —
shrugged off disappointing Chinese economic data to gain more than one
percent in morning trade.

Australia ended marginally lower, with both markets closed for the
afternoon session.

Indonesia, the Philippines and South Korea were also closed for a holiday.

Fresh manufacturing purchasing managers index data in China fell below 50
— the line between expansion and contraction — for the first time since
2016, adding to concern about the slowing domestic economy.

“The slowdown will continue into the next year,” said Larry Hu, a Hong
Kong-based economist at Macquarie Securities Ltd.

“The weak PMI could result in more government stimulus to shore up the
economy.”

The latest figures come after data showed a deepening slowdown in
November, with industrial production growth the weakest in a decade.

Oil chalked up gains on US-China trade optimism, while the dollar pared
recent losses against the safe haven Japanese currency.

– Key figures around 0300 GMT –

Tokyo – Nikkei 225: Closed for public holiday

Hong Kong – Hang Seng: UP 1.3 percent at 25,826.13

Shanghai – Composite: Closed for public holiday

Euro/dollar: DOWN at $1.1437 from $1.1445 at 2200 GMT Friday

Dollar/yen: UP at 110.45 yen from 110.16 yen

Pound/dollar: DOWN at $1.2689 from $1.2697

Oil – West Texas Intermediate: UP 36 cents at $45.69 per barrel

Oil – Brent Crude: UP $1.47 at $53.67 per barrel

New York – Dow: DOWN 0.3 percent at 23,062.40 (close)

London – FTSE 100: UP 2.3 percent at 6,733.97 (close)

BSS/AFP/HR/1025