Global markets end 2019 on a high with a 24% gain for the year

London — Global equities drifted on Tuesday while the dollar ended 2019 on a subdued note following a buoyant year of stock market gains, driven in recent weeks by hopes of an imminent US-China trade deal.

MSCI’s global share index was treading water but is on track for a 24% rise in 2019 — the index’s best performance in almost a decade. In Europe, equity markets were mixed, with Britain’s FTSE 100 slipping 0.4% while France’s CAC 40 was little changed in thin trading. Germany’s DAX 30 was closed.

Bourses in Asia also diverged. China mainland stocks gained 0.4% after data showed manufacturing activity in the world’s second-largest economy expanded for a second month in December.

The data added to optimism that trade tensions are easing between Beijing and Washington after White House trade adviser Peter Navarro said on Monday that a phase-one deal would likely be signed in the next week. He cited a report that Chinese vice-premier Liu He would visit the US this week.

“This is the second print above 50 since the purchasing managers’ index dropped into contraction in May 2019 and could be early tentative signs of stabilisation of the sector,” MUFG’s Lee Hardman wrote in a note to clients.

“It is worth remembering, however, that the phase-one trade deal (which has not even been officially signed) has only recently become a more certain prospect and that it may still take some time for a rekindling of sentiment and investment to be reflected in the economic data.”

China’s gains built on Monday’s rally, which was driven by a combination of strong retail sales growth and hopes that a new benchmark for floating-rate loans could lower borrowing costs.

Meanwhile, Hong Kong stocks fell 0.5% as protesters geared up for pro-democracy rallies on New Year’s Eve and New Year’s Day. Markets in Japan and South Korea were closed for a holiday.

Following losses on Wall Street on Monday, US stock futures showed some optimism ahead of the final session of the year, with S&P 500 e-minis up 0.1%.

In currency markets, the dollar index, which tracks the greenback against a basket of six major rivals, slipped 0.2% in its fourth straight session in the red.

The dollar continued to weaken against the yen for a third straight session, dropping 0.2% to ¥108.65 and hitting its lowest level since December 12. The euro strengthened 0.06% to buy $1.1204.

Sterling hovered around the two-week high it hit on Monday against the dollar, though the possibility of a no-deal Brexit at the end of 2020 kept any gains subdued. China’s yuan strengthened 0.3% in offshore trading against the dollar.

Oil prices were little changed with US crude at $61.67 a barrel and Brent crude at $66.83 a barrel. The global benchmark remains up 24% for the year.

Gold continued its rally on a weakening dollar. On the spot market, gold was changing hands at $1,523.14 an ounce, up 0.5%. Gold prices have risen nearly 20% in 2019.

Reuters

Source: businesslive.co.za