Business

Asian markets climb after bumper US session

Dow Jones jumps nearly 1,100 points but analysts warn of uncertainty in market

HONG KONG: Japanese shares surged nearly 4 per cent yesterday, with investors heartened by Wall Street's best performance in nine years after the White House said Fed Chair Jay Powell would not be fired.

Asian markets followed Tokyo's lead with most showing gains, giving some welcome relief from a lingering global market downturn.

Singapore was up 1.7 per cent in afternoon trade, Taiwan gained 1.7 per cent and Bangkok rose 1.5 per cent. Sydney closed up 1.9 per cent.

After morning gains, Hong Kong slid into negative territory, falling 0.3 per cent by mid-afternoon while Shanghai closed down 0.6 per cent.

"Thankfully for investors, the relentless selling on the back of risk-off sentiment which prevailed leading up to Christmas has mercifully halted... with the Dow surging over 1,000 points while adding the most significant points gain in history," said Mr Stephen Innes, head of APAC trading at OANDA.

Wall Street stocks roared back to life in post-Christmas trade on Wednesday, shaking off four straight routs following strong retail sales data and White House reassurances that Mr Powell would not be fired.

Sentiment also improved after a Bloomberg News report said a US government delegation would travel to Beijing in early January to hold trade talks, the first face-to-face discussion since US President Donald Trump and Chinese President Xi Jinping agreed on a 90-day trade war truce.

The Dow Jones Industrial Average finished up nearly 1,100 points, or about five per cent, with the broad-based S&P 500 also surging 5 per cent.

"It was possible that risk appetite wouldn't recover until after the new year but thanks to the upturns in Tokyo and New York, we are likely to see the new year in with a somewhat brighter mood," Mizuho Securities said in a note.

Many investors have been unnerved by a variety of factors, including the partial US government shutdown, the US-China trade war and Mr Trump's criticism of Fed Chair Powell.

But while a sense of relief won out for now, analysts warned that there was still much uncertainty in the market.

"Don't get too comfortable as discussions regarding the various political and policy questions remain hanging in the balance," said Mr Innes.

US stock-index futures fell as much as 0.6 per cent yesterday, suggesting investors are unlikely to sustain Wednesday's rally when US markets open.

Mr Kyle Rodda, a Melbourne-based market analyst at IG Group Holdings Plc, told Bloomberg News investors "are still nervous about how financial markets and the global economy will go during a cyclical slowdown without central bank support". - REUTERS

BUSINESS & FINANCE