LONDON: Global equities drifted yesterday while the dollar ended 2019 on a subdued note following a buoyant year of stock market gains, driven in recent weeks by hopes of an imminent US-China trade deal. Wall Street edged higher yesterday, recovering from a dip at the open, as President Donald Trump disclosed the date and location for the signing of the much-awaited initial US-China trade deal. Trump wrote in a tweet that the Phase 1 agreement would be signed on Jan. 15 at the White House and that he would later travel to Beijing to begin negotiations on the next phase.
Trade-sensitive tech stocks, including Apple Inc , were the biggest boosts to the benchmark S&P 500 index, which is on track for its best year since 2013 and the second-best year in two decades. A relatively loose monetary policy by the Federal Reserve and upbeat economic indicators have also lifted the major US stock indexes to all-time highs this month. Latest data from China showed manufacturing activity expanded for a second straight month in December, partly driven by seasonal demand.
The figures align with other signs of stabilization in the Asian economy, including last week’s data that showed profits at China’s industrial firms grew at the fastest pace in eight months in November. At home, data showed a reading of the consumer confidence index was 126.5 in December, compared with a revised 126.8 in November. Trading volumes are expected to remain thin this week, with stock markets shut for the New Year’s Day holiday today.
Advancing issues outnumbered decliners by a 2.35-to-1 ratio on the NYSE and by a 2.00-to-1 ratio on the Nasdaq. The S&P index recorded three new 52-week highs and no new low, while the Nasdaq recorded 36 new highs and 12 new lows. MSCI’s global share index was treading water but is on track for a 24 percent rise in 2019 – the index’s best performance in almost a decade. In Europe, equity markets were mixed, with Britain’s FTSE slipping 0.4 percent while France’s CAC was little changed in thin trading. Germany’s DAX was closed.
Bourses in Asia also diverged. China mainland stocks gained 0.4 percent after data showed manufacturing activity in the world’s second largest economy expanded for a second straight month in December. China’s gains built on Monday’s rally, which was driven by a combination of strong retail sales growth and hopes that a new benchmark for floating-rate loans could lower borrowing costs. Meanwhile, Hong Kong stocks fell 0.5 percent as protesters geared up for pro-democracy rallies on New Year’s Eve. Markets in Japan and South Korea were closed for a holiday.
Following losses on Wall Street on Monday, US stock futures showed some optimism ahead of the final session of the year, with S&P 500 e-minis up 0.1 percent. In currency markets, the dollar index, which tracks the greenback against a basket of six major rivals, slipped 0.2 percent in its fourth straight session in the red. The dollar continued to weaken against the yen for a third straight session, dropping 0.2 percent to 108.65 and hitting its lowest level since Dec. 12. The euro strengthened 0.06 percent to buy $1.1204. Sterling hovered around the two-week high it hit on Monday against the dollar, though the possibility of a ‘no-deal’ Brexit at the end of 2020 kept any gains subdued. China’s yuan strengthened 0.3 percent in offshore trading against the dollar.
Oil prices were little changed with US crude at $61.67 a barrel and Brent crude at $66.83 per barrel. The global benchmark remains up 24 percent for the year. Gold continued its rally on a weakening dollar. On the spot market, the precious metal was changing hands at $1,523.14 per ounce, up 0.5 percent. Gold prices have risen nearly 20 percent this year. – Reuters