Hong Kong, Shanghai Rise Over Beijing Promise

Hong Kong shares rallied on Tuesday morning, recovering from the previous day's sharp losses, as investors welcomed a pledge by the mainland officials to cut taxes as part of a move to support the stuttering economy.

The Hang Seng Index jumped 1.7 percent, to 26,746 by the break.

On the mainland, the Shanghai Composite Index gained 1 percent, to 2,560 while the Shenzhen market also rose 1 percent, to 1,315.

Tokyo gained 0.9 percent by the break while Seoul and Singapore were each more than 1 percent higher. Sydney, Wellington, Taipei and Jakarta were also well up.

Tuesday's gains were helped by reports that Beijing would take steps to boost the economy in the first quarter. The mainland's disappointing trade data on Monday sent shivers through trading floors as it showed the long-running US tariffs row is beginning to bite.

Still, uncertainty is keeping traders' feet on the ground, with the US shutdown, which is now in its fourth week beginning to fuel concerns and showing no sign of ending soon.

"There are two macro events that continue to weigh on market perspective," Frances Donald, an analyst at Manulife Asset Management, said.

"The first is where is global growth heading next, and weak Chinese trade data would suggest that global growth is certainly not bottomed as of yet. And the second issue is the persistence of the US government shutdown and how that muddies our perspective about what happens next."

The pound continues to rise against the US dollar and is now sitting above the US$1.29 mark for the first time since late November ahead of the vote by MPs on Prime Minister Theresa May's controversial Brexit deal. In Hong Kong, the pound was fetching HK$10.11. (AFP)

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