Global stocks hit new highs this week despite major stock markets taking a short holiday break. Hopes that improved relations between the US and China will lead to a formal trade agreement early next year also bolstered the world market.
After taking a break for Christmas and Boxing Day, investors returned relaxed and upbeat over the news that Beijing and Washington were in close contact as the two countries discuss an initial trade deal. US President Donald Trump also mentioned a signing ceremony for the recently agreed on Phase One deal.
Reports that US stores enjoyed robust Christmas sales also helped Wall Street to advance. The futures for both the Dow Jones and the Standard & Poor 500 indices rose by 0.3%. The two benchmarks hit new highs on Thursday, with the S&P rising 0.5% while the Dow saw 0.4% increase. Meanwhile, the Nasdaq went up 0.8%.
Traders also rejoiced when a Mastercard SpendingPulse report revealed that online holiday shopping in the US was up by 18.8% from the previous year.
Asian markets were mixed, although most were in the green. The Hang Seng Index (HSI) was up by 1.2% to 28, 202.10 while the KOSPI of South Korea advanced by 0.3% to 2,204.21. Australia’s S&P/ASX 200 rose 0.4% to 6,821.70 while the Sensex also enjoyed gains of 0.8% to 41, 507.97. Benchmarks in Singapore and Taiwan also advanced.
The Nikkei 225 dropped 0.4% to 23,837.72 while the Shanghai Composite Index went down by two points to close at 3,005.04.
Friday saw Japan reporting that its factory output went down by 0.9% in November. While its retail sales this month were 4.5% higher than the previous month, inventory levels remained high.
Europe also had a festive week as its shares were on track to be on their best year since the start of the financial crisis. The Pan-European STOXX 600 rose by 0.2%. It reportedly received a boost from export-centric German stocks. The index has also been enjoying all-time highs for three consecutive sessions now.
The FTSE 100 went up by 0.4% and is reportedly headed to its best performance in three years. The mining sector provided a much-needed push, with the BHP Group Plc and Glencore Plc both rising by 2%.
The rally enjoyed by the world market was a far cry from last year. This time last year, investors were worried about the rising tension between China and the US.
However, some analysts are still advising caution and says the trade war is far from over. There is also the unresolved issue of Brexit to contend with.