Market rallies on trade optimism, gold sinks

Market rallies on trade optimism, gold sinks

‘Risk on’ rally is likely to take centre stage on Tuesday as US and China are still moving closer to agree on a phase one trade deal with broad consensus having been reached, according to the Global Times.

People familiar with the trade talks have said the two sides have agreed to roll back tariffs as part of the phase one deal, but are still working on the details.

The S&P 500 index surged 0.75% to a record high of 3,133.6 points, led by broad gains in technology (+1.43%), healthcare (+1.07%), consumer discretionary (+0.89%) and industrials (+0.72%). Similar trading pattern is likely to appear in the Asian trading session.

Investors are fleeing away from perceived safe-havens like gold, yen and treasury, leading to a decline in their prices. Gold price consolidated for a fifth day to US$ 1,453, with an immediate support level at around US$ 1,448.

Westpac Bank CEO resigned after the lender was allegedly violating money-laundering laws in Australia. Westpac shares rebounded 1.4% this morning after slumping over 13% in the month of November. 

Alibaba is listing in HKEX at 9:30am SGT today, marking it the biggest IPO globally this year. Its share price was traded at HK$ 184.0 in the pre-IPO session. This marks a 4.5% gain compared to its IPO offer price of HK$ 176. Favourable market sentiment overnight is good news for Alibaba. Its ADR price was closed at US$ 190.45 this morning, marking a 5% premium over the HK IPO price.

The Hang Seng Index is likely to re-test a key resistance level of 27,100 today, and move even higher to the next resistance at 27,400 points this week. The prospect of the HK economy is improving as the district council election went smoothly and violent clashes have abated. Also a trade deal could be signed to rollback some tariffs soon.

In Singapore, cyclical sectors namely technology, industrial, real estate and financials may outperform the defensive ones like utility, healthcare and consumer staples.

Gold - Cash