Hong Kong (AFP) – Asian and European equity markets rallied on Tuesday following another positive day on Wall Street stoked by US data that eased recession fears, while Chinese tech firms helped propel another surge in Hong Kong. Traders have kicked off the week on a positive note after Beijing at the weekend unveiled a range of measures aimed at reigniting activity in China’s army of consumers.
That was followed Monday by figures showing US retail sales grew less than expected last month, but a separate reading—used to calculate economic growth—topped forecasts, tempering possible concerns about a possible downturn. However, while there have been no new announcements in recent days, investors continue to fret over the impact of Donald Trump’s trade war on global growth.
Hong Kong, which has piled on more than a fifth since the turn of the year, rose 2.5 percent to lead the gains Tuesday thanks to further buying of Chinese tech firms including Alibaba, Tencent, and JD.com. Electric vehicle maker BYD was also a big winner, adding more than four percent—having jumped more than six percent to a record at one point—after unveiling battery technology it says can charge in five minutes.
Shanghai also rose, along with Tokyo, Sydney, Seoul, Singapore, Taipei, Mumbai, and Bangkok. However, trading in Jakarta was halted as the market tanked more than seven percent—its biggest intraday drop since 2011—on worries about the Indonesian economy and weakening consumer spending heading into the Eid holiday period. It later resumed and pared its losses to four percent. The bourse has plunged more than 10 percent so far this year as the economy struggles, and eyes are now on the country’s central bank ahead of a policy decision due on Wednesday.
London, Paris, and Frankfurt rose at the open. The rally came after a second successive day of gains on Wall Street, which has been hammered this month by a sell-off sparked by Trump’s tariffs campaign that many fear could ramp up US inflation and hammer the economy. But SPI Asset Management’s Stephen Innes warned investors that they were not out of the woods yet. “Don’t get too comfortable — nervous eyes remain locked on Washington’s tariff tumult,” he wrote in a commentary. “The storm is far from over, and with the next escalation looming, the market is still walking a fine line between optimism and another sharp reality check.”
Uncertainty about the impact of the tariffs and renewed concerns about the Middle East after Israel struck targets in Gaza helped safe-haven gold hit a fresh record just short of $3,020. This week is due to see policy decisions by the Federal Reserve, Bank of Japan, and Bank of England, with all three forecast to stand pat on interest rates. The US central bank’s announcement will also come with updates to its outlook for the economy and interest rates this year, in light of Trump’s trade measures as well as plans to slash taxes, immigration, and federal jobs.
“We do not expect major changes in forward guidance on policy rates in the updated (policy board) statement,” said Ryan Wang, US economist for HSBC. “The statement could repeat that risks to (its) employment and inflation goals ‘are roughly in balance’ and that the ‘economic outlook is uncertain’.” However, he did say that while he saw no major changes to the bank’s median economic outlook, “the changes that we do expect are in a pessimistic direction.”
– Key figures around 0815 GMT –
Tokyo – Nikkei 225: UP 1.2 percent at 37,845.42 (close)
Hong Kong – Hang Seng Index: UP 2.5 percent at 24,740.57 (close)
Shanghai – Composite: UP 0.1 percent at 3,429.76 (close)
London – FTSE 100: UP 0.4 percent at 8,711.68
Euro/dollar: UP at $1.0929 from $1.0925 on Monday
Pound/dollar: DOWN at $1.2987 from $1.2990
Dollar/yen: UP at 149.85 yen from 149.12 yen
Euro/pound: UP at 84.16 pence from 84.07 pence
West Texas Intermediate: UP 0.8 percent at $68.12 per barrel
Brent North Sea Crude: UP 0.8 percent at $71.62 per barrel
New York – Dow: UP 0.9 percent at 41,841.63 (close)
© 2024 AFP
