Communist News

Asia Markets Follow Wall Street’s Rise, but Europe Is More Cautious

By Alexandra Stevenson and Amie Tsang
Dec. 27, 2018

HONG KONG — Global markets surged out of their holiday doldrums with big increases on Thursday driven by Wall Street’s gains, but ran out of steam in Europe.

Market indicators suggested the positive vibes were unlikely to last. Futures that track the performance of stocks in the United States suggested New York markets would open lower on Thursday.

European markets opened modestly higher after the Christmas break and many sank through the morning.

Japan’s 3.9 percent rise on Thursday led the global gains, which followed a nearly 5 percent rise on Wall Street on Wednesday. Many markets in Asia followed to a lesser extent. They were responding to a report that holiday sales were strong, as well as efforts by the White House to assure investors that President Trump did not intend to try to fire Jerome H. Powell, the Federal Reserve chairman, because he disagreed with the Fed’s monetary policies.

If the markets did not quite follow Wall Street’s rise all the way, it might have been because signs of trouble still loom. Chinese economic officials on Thursday said industrial profits in November declined for the first time in three years, a reminder that growth in the world’s second-largest economy after the United States continues to slow. Markets in China and Hong Kong bucked the global trend and finished lower.

In Japan, the Nikkei 225 stock index rose 3.9 percent after dipping into bear-market territory — meaning shares had fallen 20 percent or more from their high for the year — earlier in the week.

China’s Shanghai Composite Index fell 0.6 percent, while Hong Kong’s Hang Seng Index fell 0.7 percent.

South Korea’s Kospi index was flat, and Taiwan’s Taiex rose 1.7 percent.

In Europe, Britain’s FTSE 100 index opened 0.3 percent higher, but it was 0.5 percent lower by midmorning. France’s CAC 40 rose the most among the major indexes, gaining 1.1 percent at the open, but it turned flat by midmorning. The Dax in Germany edged 1.5 percent down through the morning.

The market open in the United States will be closely watched to see how long-lived the gains from Wednesday will be. On Wednesday, the S&P 500 rose nearly 5 percent, recording its best day since 2009, and the Nasdaq and the Dow Jones industrial average made similar gains.

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Analysts said the economy in the United States remained strong and corporate profit growth healthy, but fears remain that the Federal Reserve’s decision to continue raising interest rates could affect prospects.

Alexandra Stevenson reported from Hong Kong, and Amie Tsang from Glasgow.

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