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Global stocks rise, shrugging off US shutdown fears

NEW YORK: Global stock markets rose on Friday, with major Wall Street indices ending at all-time records, as investors shrugged off a looming shutdown of the US government.

The S&P and Nasdaq both finished at all-time highs, while the Dow also gained. Leading bourses in Europe and Asia advanced, while the dollar recovered some of its losses from the prior session against the euro.

“Investors don't appear particularly bothered about the prospect of a government shutdown, with the assumption being that (a temporary spending bill) will eventually be signed and any economic impact will be minor or non-existent,” said Craig Erlam, senior market analyst at trading firm OANDA.

Congressional Democratic leaders met with President Donald Trump at the White House early Friday afternoon to try to avert a shutdown as a midnight deadline loomed for the Republican-controlled Senate to approve a new funding bill.

Analysts say a government shutdown could damage the economy, particularly sectors that do extensive business with the government and especially if it is prolonged.

But most market watchers do not expect that to happen.

“I think the politicians themselves realize it's probably not in anybody's interest to have this be a long-term shutdown,” said JJ Kinahan, chief market strategist of TD Ameritrade.

“The market realizes it's a short-term thing and we're not going to stay shut down forever.”

Kinahan said investors are fixated much more on corporate earnings reports, which have been good so far, although the bulk of major companies have yet to report.

Fitch Ratings said a shutdown in itself would not impact the US government's top rating, but could further destabilize budget policymaking and “lead to brinkmanship” over raising the debt level before the US Treasury runs out of extraordinary measures to pay the government's bills in March or April.

In Europe, Frankfurt pushed 1.2% higher, while London managed to break a four-day losing streak despite poor UK retail sales data.

IG analyst Joshua Mahony said the “disappointing set of retail sales figures should be put in the context of shifting shopping habits”.

British retail sales slid 1.5% in December from the previous month after consumers had brought forward their Christmas shopping, official data showed.

Retail sales had jumped by 1.0% in November, boosted by Black Friday price reductions, the Office for National Statistics said.

Asian markets mostly rose Friday after another positive week across trading floors.

Key figures around 2200 GMT

New York – DOW: UP 0.2% at 26,071.72 (close)

New York – S&P 500: UP 0.4% at 2,810.30 (close)

New York – Nasdaq: UP 0.6% to 7,336.38 (close)

London – FTSE 100: UP 0.4% at 7,730.79 (close)

Frankfurt – DAX 30: UP 1.2% at 13,434.45 (close)

Paris – CAC 40: UP 0.6% at 5,526.51 (close)

EURO STOXX 50: UP 0.8% at 3,648.91

Tokyo – Nikkei 225: UP 0.2% at 23,808.06 (close)

Hong Kong – Hang Seng: UP 0.4% at 32,254.89 (close)

Shanghai – Composite: UP 0.4% at 3,487.86 (close)

Euro/dollar: DOWN at 1.2225 from US$1.2243 at 2200 GMT

Pound/dollar: DOWN at US$1.3860 from US$1.3898

Dollar/yen: DOWN at 110.77 yen from 111.02 yen

Oil – Brent North Sea: DOWN 70 cents at US$68.61 per barrel

Oil – West Texas Intermediate: DOWN 58 cents at US$63.37 per barrel

RM1 = US$3.94


Bursa Malaysia to continue upward momentum next week

KUALA LUMPUR: Bursa Malaysia is expected to continue its positive momentum next week, driven by a stronger ringgit, firmer oil price, strong global economic outlook, and better corporate earnings, a dealer said.

Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr Nazri Khan Adam Khan said the global economic outlook is looking good so far this year, triggered by buying interest among local and foreign investors.

“It has been a good start (for FBM KLCI) this year, with positive outlook on the local and global economy. The local benchmark index has experienced the highest fund inflows in three years, signalling investors' confident towards our market,” he told Bernama.

For next week, he said that the FBM KLCI would likely move between 1,800 and 1,850 points.

“The strong oil prices have so far lent support to our market, of which about 30 per cent of companies in Bursa Malaysia are directly and indirectly involved in the oil and gas industry,” he said.

He said that the benchmark index would also be affected by US President Donald Trump's tax reform plan.

As the week ended, the market was traded mostly higher, benefitting from gains in the Wall Street, as well as positive economic data from China.

However, the European Union's (EU) approval of draft measures to back a ban on the use of palm oil in biofuels from 2021 on Thursday has hurt the plantation and palm oil related counters as the commodity is a major export from Southeast Asia to the EU.

On a Friday-to-Friday comparison, the FBM KLCI performed better, gaining 6.16 points to end the week at 1,828.83.

On the scoreboard, the FBM Emas Index slipped 26.78 points to 13,195.82, the FBMT 100 Index decreased 2.06 points to 12,860.60, the FBM Emas Syariah Index dipped 79.87 points to 13,627.46, the FBM 70 shed 154.79 points to 16,472.37, and the FBM Ace fell 192.66 points to 6,713.12.

On a sectoral basis, the Finance Index surged 26.07 points to 17,236.98, the Plantation Index fell 99.45 points to 8,037.87 and the Industrial Index erased 31.52 points to 3,368.02.

Total turnover slipped to 25.35 billion units valued at RM15.97 billion from 27.14 billion units valued at RM19.11 billion in the previous week.

Main Market volume decreased to 17.14 billion shares worth RM14.73 billion from the previous Friday's 17.88 billion shares worth RM17.59 billion.

Warrants turnover declined to 2.64 billion units worth RM448 million from 3.46 billion units worth at RM479.51 million previously.

The ACE Market narrowed to 5.51 billion shares valued at RM778.77 million against the previous week's 5.74 billion shares valued at RM1.02 billion. — Bernama


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