Sydney: Asian stocks, closing in on their worst year since 2011, got some relief on the last day of 2018 after U.S. President Donald Trump reported “big progress" in trade talks with his Chinese counterpart. The yen declined. Equities gained in Hong Kong and Australia, along with S&P 500 Index futures, after Trump said in a tweet that negotiations were “moving along very well" toward a comprehensive deal and Chinese state media cited President Xi Jinping as saying he believed both sides wanted “stable progress." Trading will be thin with major markets in Japan and China closed and shortened sessions elsewhere. Oil extended gains on the trade optimism.
The positive sentiment was damped a bit after a gauge of China’s manufacturing industry missed estimates to decline in December, underscoring concern over the slowing domestic economy. The manufacturing purchasing managers index fell to 49.4, falling below 50 -- the line between expansion and contraction -- for the first time since 2016
Global stocks are set for their worst year since 2008 and oil is mired in its steepest quarterly slump since 2014. Plenty of event risks loom next year, from the U.K. vote on the Brexit deal to U.S.-China trade talks and the continuing showdown between President Trump and Congress over the budget. The American political landscape is also unsettling investors following departures of senior officials and Trump’s repeated criticism of Federal Reserve Chairman Jerome Powell.
“It’s a positive development," Tony Morriss, Bank of America Merrill Lynch head of economics and rates strategy, said in a Bloomberg TV interview, referring to the easing trade tensions. “What we’d like to see now is the market pricing out any further action from the Fed, the stock markets stabilizing and focusing on some positive headlines on trade. That still leaves an awful lot of uncertainty on the political side" going into 2019, he said.
U.S. stocks halted a two-day rally Friday as thin trading added to already-volatile markets, though the S&P 500 Index held onto its first weekly gain in a month. Treasuries, which rose on Friday, won’t be trading Monday because of the holiday in Japan.
Markets are also closed in South Korea, the Philippines, Taiwan and Thailand.
Hong Kong’s Hang Seng Index climbed 0.7 percent as of 9:30 a.m. in Hong Kong. Australia’s S&P/ASX 200 Index rose 0.6 percent. S&P 500 futures rose 0.6 percent. The S&P 500 Index fell 0.1 percent Friday. The MSCI Asia Pacific ex Japan Index added 0.4 percent.
The yen dipped 0.1 percent to 110.36 per dollar. The offshore yuan was at 6.8805 per dollar. The Bloomberg Dollar Spot Index was steady. The euro traded at $1.1441. The British pound was at $1.2689, down 0.1 percent.
The yield on 10-year Treasuries dipped five basis points to 2.72 percent Friday. Australia’s 10-year bond yield fell about three basis points to 2.34 percent.
West Texas Intermediate crude gained 0.3 percent to $45.47 a barrel, extending a 1.6 percent advance Friday. Gold was steady at $1,278.94 an ounce.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.