Stock markets in Asia have kicked off the week with a nice lift: Hong Kong’s benchmark index rallied almost 2 percent at one point, South Korean equities jumped more than 1 percent, and Taiwan and the Philippines also had good starts.
It’s nothing like what happened in the U.S., where the S&P 500 Index had its third-worst Thanksgiving week since 1939. With Monday’s gains, the MSCI Asia Pacific Index is heading for a 1 percent increase in November, and if the rally holds this week it would be its first monthly advance since July.
So what’s causing Monday’s surge? It could be a rally in Hong Kong developers that boosted the Hang Seng Index. Or the Topix index, which edged higher as construction and transport stocks rallied after Osaka won the bid to host the 2025 World Expo. The magnitude of this year’s equity sell-off is also prompting market players to call a bottom in some markets:
- Morgan Stanley’s strategist Jonathan Garner called time on his bearish view on emerging markets and upgraded on both EM and Japan for 2019.
- Jefferies analyst Sean Darby said in a 2019 outlook report that the Topix may climb to 1,900 as a loose monetary policy and cheap yen support the nation’s economy.
- In Australia, two big research firms were at odds on where the stock market may go next year: Morgan Stanley downgraded shares to underweight, while Citigroup’s Tony Brennan wrote that the S&P/ASX 200 Index may rise to 6,500.
In Taiwan, the key equity gauge rose the most this month after the pro-China Kuomintang inflicted a resounding defeat on leader Tsai Ing-wen’s party in local elections. That could mean an improvement in relations with the mainland and that is good for cross-strait business, according to Bloomberg Markets Live strategist Mark Cranfield.
And in Southeast Asia, both the Singapore and Philippine stock markets were on a tear Monday. In particular, the Philippine Stock Exchange Index jumped more than 1 percent, breaking past the 7,400 level as foreigners stepped back into the market as net buyers for two straight days.
Still, whether the gain can last for the rest of the week is anyone’s guess. As Bloomberg Television’s David Ingles put it, it’s looking like a “monumental week” ahead for the market as we wait for some clarity on two big issues: the China-U.S. spat and the Fed’s tightening cycle. So far, the signs have been positive but as we’ve seen this year, things can change in the blink of an eye.
Here’s what’s expected this week:
- Presidents Donald Trump and Xi Jinping plan to meet at the G-20 summit in Argentina that kicks off on Friday.
- Federal Reserve Vice Chairman Richard Clarida will speak on Tuesday, and Chairman Jerome Powell will address the New York Economic Club on Wednesday. Fed minutes from the November meeting are scheduled to be released on Thursday. Click here to read more about views from Bloomberg Intelligence economists.
- China will post November manufacturing, non-manufacturing PMI figures on Friday.
- India will release second-quarter fiscal 2019 GDP on Friday.
- Earnings: Tingyi, Chow Tai Fook, Malayan Banking, CIMB Group, Thai Beverage
What’s worth noting is that energy stocks remain the biggest drag in Asia. Crude traded below $51 a barrel on concerns record output by Saudi Arabia may exacerbate a supply glut, and as President Donald Trump continued to call for lower prices. But on the other side of the story, Asian airlines are flying high as they should be benefit from lower fuel prices.
Other notable movers in Asia:
- Japanese Construction Stocks Bolstered by Osaka’s World Expo Win
- Chinese Airline Stocks Fly High on Crude Slump as Oil Firms Slip
- FamilyMart Climbs Amid Speculation Over Liquidity, Price Issues
- Amada Climbs as MUFJ-MS Sees Earnings Boost From Fiber Lasers
- Shimamura Slides as Monthly Sales Drop Worse Than Expected
- Metro Glass Dives on Lower Profit Forecast, Dividend Halt
- Japan’s Topix index up 0.2%; Nikkei 225 up 0.8%
- Hong Kong’s Hang Seng Index up 1.4%; Hang Seng China Enterprises up 0.9%; Shanghai Composite down 0.4%
- Taiwan’s Taiex index up 1%
- South Korea’s Kospi index up 1.2%; Kospi 200 up 1.3%
- Australia’s S&P/ASX 200 down 0.8%; New Zealand’s S&P/NZX 50 down 0.4%
- India’s S&P BSE Sensex Index little changed; NSE Nifty 50 down 0.2%;
- Singapore’s Straits Times Index up 0.7%; Malaysia’s KLCI down 0.3%; Philippine Stock Exchange up 1.1%; Jakarta Composite little changed; Thailand’s SET little changed; Vietnam’s VN Index little changed