HK stocks end firmer as China data lifts risk appetite

Marco Green
December 2, 2019

The buoyant mood among investors was also evident in the US dollar, which has tended to perform well on hopes for a trade deal.

There was little immediate reaction on markets to news that China had slapped punitive measures on the USA in retaliation for its backing of a pro-democracy movement in Hong Kong, announcing sanctions on NGOs and suspending visits by United States warships and aircraft.

Asian markets were bought off due to uncertainty over how US markets will perceive the latest conflict between the USA and China over Hong Kong.

Trump then accused Brazil and Argentina of a "massive devaluation" of their currencies and said he would immediately restore tariffs on US steel and aluminum imports.

Elsewhere in Asia, the in Japan added 0.97 percent to close at 21,713.21 as shares of index heavyweight soared 5.44 percent.

Meanwhile, the Shanghai Composite is trading at 2,881, representing a 0.32% or nine-point gain on the day. U.S. S&P 500 mini futures were down 0.26%.

Surveys by an official Chinese trade group and a major business magazine showed unexpectedly strong factory activity.

The market enjoyed a boost after the Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) index rose to 51.8 in November from 51.7 in the previous month, marking the fastest expansion since December 2016.

The return to expansionary territory "strengthened the case for a short-term growth stabilization", said Citigroup economists in a report.

Markets are now focused on the U.S. Institute for Supply Management's November manufacturing survey, which is due at 1500 GMT, for a further gauge of the health of the U.S. economy, followed later in the week by closely watched jobs data. -Chinese talks on terms of the "Phase 1" deal announced by President Donald Trump in October amid negotiations aimed at ending a costly tariff war.

Investors have been sticking with the broad view that a further escalation in the trade war between China, the US and other countries can be avoided, even after last week's decision by Trump to sign legislation backing protesters in Hong Kong, which enraged China.

The measure could alter treatment of Hong Kong as a separate territory for trade if the State Department determines it no longer has enough autonomy from the Chinese mainland.

Brent crude futures rose 1.41% to $61.34 a barrel while U.S. West Texas Intermediate (WTI) crude gained 1.78% to $56.15 per barrel.

The CSI300 index rose 0.5% to 3,847.85 at the end of the morning session, while the Shanghai Composite Index gained 0.4% to 2,882.00.

The gains chipped away at some of the huge losses suffered Friday after reports said Russian Federation was looking to delay any further output reductions until April's gathering.

The British pound slipped 0.22% to $1.2914 after opinion polls during the weekend showed Prime Minister Boris Johnson's Conservative Party saw its lead over the opposition Labour Party narrow.

Other reports by Click Lancashire

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