HONG KONG, Dec 31 — Hong Kong headed for a positive end to a tough year today, 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 US$300 billion (RM1.245 trillion) 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.”
‘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. — AFP
Source: The Malay Mail Online