Global rally extends in Asia as Hong Kong tops 30,000 mark

File picture shows a floor trader monitoring share prices during afternoon trading at the Hong Kong Stock Exchange in Hong Kong, September 26, 2016. — Reuters picFile picture shows a floor trader monitoring share prices during afternoon trading at the Hong Kong Stock Exchange in Hong Kong, September 26, 2016. — Reuters picHONG KONG, Nov 22 — Hong Kong stocks ended above the 30,000 mark for the first time in 10 years today 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 and earnings, while they remain upbeat that US lawmakers will eventually push through much-vaunted tax cuts.

All three main indexes in New York closed at all-time highs once again as dealers there begin to wind down for the Thanksgiving holiday tomorrow.

Tech firms were the big winners, with top titans including Apple, Amazon, Facebook and Google parent Alphabet firming more than one per cent.

The positive energy flowed through to Asia, where Hong Kong pushed 0.6 per cent higher, sitting above the 30,000 barrier for the first time since late 2007.

The Hang Seng Index has soared by a third this year, boosted by Tencent, which has doubled in value in that period — helping the internet giant surpass half a trillion dollars in market capitalisation and overtaking Facebook.

The HSI is less than 2,000 points off its record high seen in October 2007, and Kevin Tam, deputy head of research at Core Yamaichi, told AFP: “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 Literature will be included for that quarter. Literature almost doubled in value on its debut earlier this month. However, Tencent slipped 0.7 per cent on profit-taking today.

Across the rest of Asia investors were buoyant, sending Tokyo jumping 0.5 per cent, Shanghai 0.6 per cent up and Sydney 0.4 per cent higher.

Seoul, and Taipei each rose 0.4 per cent, while Jakarta and Wellington were also well up.

Positive outlook

“When thinking about the year ahead it does seem to me that given where growth is, where central banks are, where is, and even with many tight labour markets around the world, the best course is to extrapolate this year’s trends into the future,” said Greg McKenna, chief market strategist at AxiTrader.

World markets had taken a step back on concerns that 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 will 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.”

On currency markets the euro stabilised after tanking earlier this week on political uncertainty in Germany — Europe’s biggest economy — after Chancellor Angela Merkel’s talks to form a coalition government failed.

The country’s president spoke to party leaders yesterdayin a last-ditch attempt to avert a crisis.

Oil prices rallied to near two-year highs, boosting regional energy firms after data pointed to a drop in , while investors are awaiting a meeting of OPEC next week hoping it will extend an output cut.

Michael McCarthy, a chief strategist at CMC Markets in Sydney, said: “A lot of traders are speculating about the potential outcome of the OPEC meeting. Expectations are high and that could lead to disappointment if OPEC and its partners don’t deliver, but it doesn’t seem many are prepared to take the risk of that happening.”

In early European trade London was flat, Paris fell 0.2 per cent and Frankfurt added 0.2 per cent.

Key figures around 0820 GMT

Tokyo – Nikkei 225: UP 0.5 per cent at 22,523.15 (close)

Hong Kong – Hang Seng: UP 0.6 per cent at 30,003.49 (close)

Shanghai – Composite: UP 0.6 per cent at 3430.46 (close)

London – FTSE 100: FLAT at 7,412.31

Euro/dollar: UP at US$1.1750 from US$1.1740 at 2200 GMT

Pound/dollar: UP at US$1.3260 from US$1.3244

Dollar/yen: DOWN at 112.15 yen from 112.44 yen

Oil – West Texas Intermediate: UP US$1.02 at US$57.85 per barrel

Oil – Brent North Sea: UP 64 cents at US$63.21

New York – DOW: UP 0.7 per cent at 23,590.83 (close)


Source: The Malay Mail Online

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