Wednesday’s trading in Asia showed gains in major indices across the continent except China, ironically coming on the back of favorable China trade data.
While the Shanghai Composite fell 2.4% today, the rest of Asia and Europe were broadly up. Japan’s Nikkei 225 is up another 2.9% today, with the Hong Kong’s Hang Seng shrugging off further weakness in mainland China next door.
The China factor
China’s strong December trade data was a major catalyst for the gains registered across Asia as the world’s second largest economy showed far greater resilience than the market expected. December exports increased 1.4% although analysts predicted that exports would shrink 8% in the month. The 7.6% fall in imports was also smaller than a fall of 11.5% that analysts expected.
December marked the first time that China’s exports improved after six months of sustained declines. China also reported that its trade surplus increased to $60.1 billion, beating analysts’ estimate of $53 billion and also exceeding the previous month’s figure of $54.1 billion.
US Indices Bounce With Oil
In the U.S., favorable employment data seemed to drive shares up despite a continued rout in crude oil prices. Domestic crude futures fell below $30 per barrel briefly, the lowest price level since December 2003. A strong bounce quickly followed bringing oil back up above $31.
Despite the continued oil freefall, major indices registered decent gains yesterday and futures are broadly up again today. The Dow Jones Industrial Average rose 0.72% to close the day at 16,516.22 after adding 117.65 with futures up in the triple digits again. UnitedHealth Group Incorporated (NYSE: UNH) led gains while EI du Pont de Nemours and Company (NYSE: DD) led losses, down 1%.
The NASDAQ Composite led US stocks, up 1.03% to add 47.93, finishing the day at 4686, with futures up another half percent this morning. The S&P 500 also finished strong yesterday and continues higher, with the index adding 15 points finishing the day at 1,938.68. Cognizant Technology Solutions (NASDAQ: CTSH) was the top performer up over 6%.
In the U.S., technology, industrial, and healthcare shares were the bright spots while telecom and utility stocks were stragglers, but not enough to deny the major indices gains.