HONG KONG, China (AFP) — Hong Kong stocks climbed to a fresh record on Thursday as investors tracked another milestone on Wall Street but Asia-wide markets struggled to keep up the recent momentum.
But while the afternoon saw a slight wobble across the region and some analysts warned of a possible correction, traders remain bullish on equities thanks to a healthy global economic outlook, optimism over the impact of Donald trump’s tax cuts and strong corporate earnings.
Hong Kong rose 0.3 percent in the afternoon, holding above the 32,000 mark it broke in the morning for the first time in its history. The market has fallen only once in the past 17 trading days.
Shanghai ended up 0.9 percent. After the market closed data showed the Chinese economy grew a forecast-beating 6.9 percent in 2017, the first annual improvement since 2010.
Analysts surveyed by AFP had predicted 6.8 percent growth, which was better than the government target of around 6.5 percent.
Seoul was slightly higher, while Taipei, Bangkok and Jakarta also rose.
However, Tokyo dipped 0.4 after a late sell-off on profit-taking but still sits at 26-year highs, while Sydney was marginally lower and Singapore shed 0.5 percent. Wellington and Manila were also down.
A survey by Bank of America found fund managers were upbeat about the outlook and see equities continuing to rise into next year.
And Lucy MacDonald, chief investment officer for global equities at Allianz Global Investors, told Bloomberg Television: “It’s time for relative caution but we’re still overall pro-equity.”
Word of caution
However, she added that “nominal returns in markets are liable to be lower than they’ve been in the recent past.”
There was also a word of caution from Joachim Fels at Pacific Investment Management, who said “the fact that the fear is gone is the main reason why we should be worried.”
Traders started on the front foot after Apple said will pay almost $40 billion in taxes to repatriate $350 billion following Trump’s tax cuts, adding that it will also boost jobs, hike wages and spend more on innovation.
“This is exactly the encouragement that Trump’s tax policy constructed for. The move by Apple will influence and at the same time impose pressure on other multinationals to follow suit,” said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers.
The pound held gains against the dollar after climbing Wednesday on comments from European Commission chief Jean-Claude Juncker that he would welcome any British attempt to rejoin the EU after it leaves.
The remarks raised hopes Britain could exit on more favourable terms than have been expected and follow speculation about a possible second referendum.
“Some smooth-talking from Jean-Claude Juncker helped propel the pound… as he appeared to not only suggest that the UK could come back after they leave but equally in the change of tone reflects that a ‘soft’ Brexit is now becoming a high probability,” said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.
Bitcoin climbed more than 10 percent to $11,000, according to Bloomberg data, a day after falling through the $10,000 mark for the first time since mid-December.
Key figures around 0720 GMT
Tokyo – Nikkei 225: DOWN 0.4 percent at 23,763.37 (close)
Hong Kong – Hang Seng: UP 0.3 percent at 32,077.44
Shanghai – Composite: UP 0.9 percent at 3,474.75 (close)
Euro/dollar: UP at $1.2204 from $1.2198 at 2200 GMT
Pound/dollar: DOWN at $1.3832 from $1.3833
Dollar/yen: DOWN at 111.21 yen from 111.26 yen
Oil – West Texas Intermediate: UP five cents at $64.02
Oil – Brent North Sea: DOWN two cents at $69.36
New York – DOW: UP 1.3 percent at 26,115.65 (close)
London – FTSE 100: DOWN 0.4 percent at 7,725.43 (close)
© Agence France-Presse
