US stocks drift higher, adding to 2019 bounty

HONG KONG/ NEW YORK —  Wall Street stocks drifted higher in early trading on Thursday, adding to a heady December that looks poised to cap a good year for equities.

Investors were expecting light trading volumes in New York on the day after Christmas, traditionally a sleepy session and a day when major stock markets are closed.

"Liquidity isn't running dry, but it is parched with so many other major markets around the world closed and so many US participants remaining in holiday mode," said Briefing.com analyst Patrick O'Hare.

About 15 minutes into trading, the Dow Jones Industrial Average stood at 28,571.29, up 0.2 per cent.

Also, Asian equities rose on Thursday in subdued trading, holding the gains recently spurred by the US-China trade thaw.

Following the Christmas lull, investors were waiting, in particular, for US unemployment data that was due later in the day, and Japanese industrial and retail data that was scheduled for release on Friday.

Tokyo's benchmark Nikkei index closed 0.6 per cent higher after a flat start. Shanghai put on 0.9 per cent, while Seoul was up 0.4 per cent. Singapore, however, was down 0.3 per cent.

"Investor sentiment towards the global economy is improving," said Rakuten Securities Chief Strategist Masayuki Kubota.

Hong Kong, Sydney and Wellington were closed for a public holiday.

"With the... tech sector giants leading the way, investors are showing no fear as the market remains underpinned by the thawing in the US-China trade squabble and easy central bank policy," Stephen Innes, chief Asia market strategist at AxiTrader, said in a report.

Volumes are typically light during the holiday season, and the muted activity in Asia followed sleepy Christmas Eve sessions in many world markets.

"No news being good news, Asia should maintain... gains ahead of a US session likely to be positive," Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA, wrote in a note earlier in the day.

In oil markets, the main contracts traded higher as the commodity remained strong thanks to trade optimism as well as the OPEC+ output reduction agreement.

Brent Crude and West Texas Intermediate were both up 0.2 per cent.

"Oil prices continue to show year-end strength supported by a combination of definitive progress on the US-China trade deal, the... OPEC/OPEC+ agreement, and slowing shale activity," wrote AxiTrader's Innes.

"All of which is pointing to a stronger performance for oil prices in Q1 than anyone had thought only two months ago."

World markets were spooked by the long-running, tit-for-tat trade war between the United States and China, with analysts warning that the bruising rift between the world's two biggest economies could harm global economic growth.

Washington and Beijing have agreed to an initial trade deal, which they are expected to finalise in January, and the improvement in ties has boosted markets with investors hoping for a smoother ride into the new year.