World stocks close out 2019 with ro­bust gains

Muscat Daily - - BUSINESS -

New York, US - World stocks on Tues­day closed out a no­tably prof­itable year, with Wall Street record­ing its best an­nual per­for­mances since 2013, boosted by hopes for a US-China trade deal.

New York ral­lied into the close, turn­ing pos­i­tive for the day and leav­ing the broad-based S&P 500 and tech-heavy Nas­daq up 29 per cent and 35 per cent re­spec­tively for 2019, the best show­ings in six years.

Key European mar­kets showed in­creases of 25 per cent or more for the year, partly thanks to late surges on re­ced­ing re­ces­sion fears and eas­ing China-US trade war ten­sions.

Brexit-hit Lon­don, how­ever, trailed its peers with a 12 per cent an­nual rise, less than half the per­cent­age in­crease man­aged by Paris, Frank­furt and Mi­lan.

Ear­lier on Tues­day as US mar­kets were about to open, Pres­i­dent Don­ald Trump tweeted that a par­tial trade deal with China would be signed in Wash­ing­ton on Jan­uary 15, end­ing some of the un­cer­tainty about ef­forts to ce­ment the deal an­nounced ear­lier last month.

Quincy Krosby of Pru­den­tial Fi­nan­cial told AFP the US-China de­tente could help de­cide the di­rec­tion of the global econ­omy this year.

“Much of the en­thu­si­asm in the mar­ket is based on the idea that global growth is go­ing to be­gin to ac­cel­er­ate, al­beit slowly,” she said. “The question will be, do we ac­tu­ally see pos­i­tive growth, es­pe­cially in China?”

De­mand in China is cru­cial to chances for re­newed growth in global trade, while the China trade agree­ment could see US cor­po­ra­tions be­gin in­vest­ing again af­ter a year when cor­po­rate cap­i­tal spend­ing stag­nated wor­ry­ingly, ac­cord­ing to Krosby.

Asian stock mar­kets closed mainly lower on Tues­day, with Hong Kong end­ing a half-day of trad­ing al­most 0.5 per cent down, although the bourse ral­lied more than 7 per cent in De­cem­ber. Tokyo was shut for a pub­lic hol­i­day.

“While mar­ket vol­umes are predictabl­y light, in­vestors con­tinue to strike a year-end cau­tion­ary tone as De­cem­ber op­ti­mism is grad­u­ally giv­ing way to 2020’s un­cer­tainty,” Stephen Innes, chief Asia mar­ket strate­gist at Ax­iTrader, said in a client note.

Asian in­vestors were also watch­ing for sig­nif­i­cant pol­icy an­nounce­ments early in the New Year.

In a New Year’s speech on Wed­nes­day, North Korean leader Kim Jong Un struck a de­ci­sively mil­i­taris­tic tone, warn­ing of a new strate­gic weapon and ‘shock­ing’ ac­tion.

An­a­lysts said all eyes were on nu­clear-armed Py­ongyang’s threat of a ‘new way’ af­ter its end-of-year dead­line for sanc­tions re­lief from the United States.

An ad­dress by China’s Pres­i­dent Xi Jin­ping was fol­lowed closely by the mar­kets as well.

Else­where on Tues­day, oil prices slid de­spite reports Iran had seized a ves­sel sus­pected of smug­gling fuel near the Strait of Hor­muz - a choke­point for a third of the world’s seaborne oil.

Over the year, the price of Brent North Sea crude jumped by al­most one quar­ter and the New York bench­mark con­tract WTI soared more than one third in value, helped by tighter sup­ply.

The pound fin­ished a vo­latile year with gains on Tues­day against the dol­lar and euro.

(Bloomberg)

Traders work on the floor of the New York Stock Ex­change (NYSE) in New York, US on Tues­day

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