World stock markets opened the year on a high note, with Hong Kong’s index up more than 4 percent, as investors shrugged off more dreary economic news to focus on government moves to ease the global slump.
With most investors away for the holidays and more than half the region’s markets still closed, trading volumes were extremely light, which exaggerates price moves. Chinese telecom firms surged after Beijing approved next-generation mobile licenses, and commodity companies were lifted by stronger prices for raw materials. European benchmarks followed Asia higher in early trade.
But many analysts found little reason to be optimistic about the world economy as a whole. After one of the worst years ever for global equities, many expect more volatility in the first half as the effects of falling exports and higher capital costs start showing up on company balance sheets.
John Mar, co-head of sales trading at Daiwa Securities SMBC Co in Hong Kong, said: “There will be trading opportunities, but I don’t think we’ve hit the bottom yet.”
“We should get more clarity when we see US earnings reports in 2 weeks time,” he said. “It’s pretty apparent that they won’t be good, but market reaction to these results will help indicate if current levels have priced in a bad earnings environment.”
Across Asia there were signs of further deterioration in local economies.
Singapore said yesterday its economy shrank for a third consecutive quarter, by 12.5 percent, and lowered this year’s growth forecast, saying the economy could contract as much as 2 percent or in the best case scenario grow just 1 percent.
China’s manufacturing sector, which accounts for 43 percent of the economy, contracted for a fifth straight month last month, a CLSA survey showed. South Korea, Asia’s fourth-largest economy, suffered a trade deficit for last year — its first in a decade.
For their part, South Korean investors seemed to ignore the downbeat news after South Korean President Lee Myung-bak said his priority in the new year would be combating the global economic crisis. Indian investors were awaiting a second economic stimulus package from the government, expected to be unveiled late yesterday.
As trading got under way in Europe, Britain’s FTSE 100 edged up 0.9 percent, Germany’s DAX rose 1.7 percent and France’s CAC 40 was 1.5 percent higher.
The three key markets had shed between 31 percent and 43 percent last year.
“The mindset may be that the turmoil of 2008 is now behind us and that 2009, although not set to be great, needs to start with a bang,” CMC Markets trader Jimmy Yates said.
In Asia, Hong Kong’s Hang Seng Index led the region’s session, vaulting 655.33 points, or 4.6 percent, to 15,042.81 points. South Korea’s Kospi added 2.9 percent to 1,157.40, Singapore’s benchmark rose 3.9 percent and Mumbai’s Sensex traded 0.6 percent higher.
Meanwhile, markets in Japan, China, Taiwan, Indonesia, the Philippines, Thailand and New Zealand were closed.
Among the top gainers were Chinese telecom firms after Beijing said on Wednesday it had approved licenses for next-generation mobile phone services. China Mobile Ltd (中國移動通信), the world’s biggest phone carrier by subscribers, gained 4.8 percent and China Unicom Ltd (中國聯通) soared 8.8 percent.
Shares in energy and metal producers were buoyed by a jump in commodity prices earlier this week, with Chinese upstream producer CNOOC up 4.8 percent and Australia’s Woodside Petroleum Ltd, the country’s No. 2 oil company, adding 1.7 percent.
In South Korea, Hyundai Motor Co soared 6.2 percent after Lee said the government would drastically increase spending and take steps to provide sufficient liquidity to the currency market, boost domestic demand, keep jobs and support smaller firms.
“I won’t neglect even for a moment checking the economic situation and drawing up countermeasures and implementing them,” Lee said. “It’s time for us to unite.”
It was not all positive news however, as Australian share prices shed 0.2 percent following falls in many financial stocks.
“With many traders still not back at their desks until Monday we will yet again see some thin volumes and maybe a degree of volatility,” Yates said.
On Wednesday in New York, Wall Street finished its last trading day of last year with a modest gain.
The Dow rose 108.00 points, or 1.3 percent, to 8,776.39, and the Standard & Poor’s 500 index gained 12.61, or 1.4 percent, to 903.25.
Dendra Lambert, analyst at Hilliard Lyons, said a two-day rally to close out the year was a positive sign.
“After experiencing the worst losses since the Great Depression, some onlookers believe bargain hunters were starting to emerge in the final days of trading of 2008,” she said.
ASE Technology Holding Co (ASE, 日月光投控) yesterday launched its second testing facility in San Jose, California, to expand advanced chip testing capacity such as burn-in testing to satisfy customers’ rising engineering needs for emerging semiconductor applications, such as artificial intelligence (AI) and high-performance computing (HPC). ISE Labs Inc, a fully owned subsidiary of ASE, would operate the advanced testing facility. When added to its first facility in nearby Fremont, ISE would double its available research-and-development lab and business space to 150,000m2 in hopes of boosting the US semiconductor supply chain, the company said in a statement. “As the semiconductor manufacturing supply chain reshoring
The entry of chip giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) into the elite club of the world’s most valuable companies is further proof that the generative artificial intelligence (AI) revolution is shaking up Wall Street. TSMC, which is listed in Taipei and New York, on Monday briefly broke the US$1-trillion market capitalization barrier, putting it ahead of Tesla Inc as the seventh-most valuable technology giant on the stock market. Also on Monday, Alphabet Inc, Apple Inc and Meta Platforms Inc hit all-time highs. The top 10 of the world’s most valuable companies is headed by Microsoft Corp and Apple, closely followed by
ASSASSINATION ATTEMPT: The previous shooting targeting a US president or major party candidate was the 1981 incident targeting then-US president Ronald Reagan Saturday’s shooting at former US president Donald Trump’s election rally raises his odds of winning back the White House, and trades betting on his victory would increase this coming week, investors said yesterday. Trump was shot in the ear during the rally in Pennsylvania on Saturday in what the authorities were treating as an assassination attempt. Trump, his face spattered with blood, pumped his fist moments after the attack, and his campaign said he was fine after the incident. Before the shooting, markets had reacted to the prospect of a Trump presidency by pushing the US dollar higher and positioning for a
VALUE: TSMC’s market capitalization far exceeds the combined size of all the Latin American companies on MSCI Inc’s benchmark for emerging markets Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) US$420 billion equity rally this year would get a valuation test this week when it reports earnings, with analysts expecting the chipmaker to raise full-year sales forecasts. The world’s biggest contract chipmaker would probably report a 29 percent increase in second-quarter net income on Thursday, according to the median estimate of analysts surveyed by Bloomberg. More importantly, analysts from JPMorgan Chase & Co to Morgan Stanley expect it to also raise its full-year sales guidance, justifying another round of valuation expansion. Just like Nvidia Corp, TSMC has become a favorite artificial intelligence (AI)-bet for investors with