HONG KONG Feb 7 (Reuters) - The coming Year of the Snake will see financial markets slither higher as optimism grows, although the risk of disasters and territorial disputes in Asia also looms, say practitioners of the ancient Chinese art of feng shui.
Believers in the Chinese form of geomancy maintain the universe is made up of five elements -- earth, water, fire, wood and metal -- that define the collective mood in the world.
The Snake year starting on Feb 10 contains much fire, which brings energy, but also water, which tempers more negative fire traits.
"We will see a lot of positive energy coming and people will have more confidence in economic recovery," said feng shui master Raymond Lo, adding that a lack of the fire element led to financial woes and doomsday speculation over the last few years.
"The stock market is already going up. Even stronger fire will come in 2014, the Year of the Horse, and that means longer-term recovery could be quite substantial and will last for a few years," he said.
Global stocks climbed to their highest in nearly two years last Friday, helped by upbeat manufacturing and employment data that signaled a recovery is on track.
Lai Hon-fai, another seer in the Asian financial centre, agrees that the even more promising Year of the Horse could further boost Hong Kong's benchmark stock index, the Hang Seng.
"The Hang Seng index will reach 24,000 to 25,000 by the end of the Snake year, higher than its current level," he said. It stood at 23,214.40 on Thursday morning.
Indeed, most economies have now turned a corner, although Europe may still need two more years to bottom out, said Peter So, a pony-tailed feng shui master.
"Water-related stocks will flourish, including banking, finance, trade, shipping, tourism, and even gambling shares," he said.
For those seeking housing in Hong Kong, this year could mark the start of some welcome relief in its overheated property market, which has seen residential prices hit a record high.
The coming year is the first of three fire years, with prices likely to fall - especially after this summer, So said.
SNAKES AND LEADERS
On a more gloomy note, Lo, a feng shui practitioner for more than two decades, warned that disasters and territorial friction could loom.
Snake years have a record of violence. The September 11 U.S. terror attack happened in the last Year of the Snake in 2001, and the previous one in 1989 saw the June 4 crackdown on pro-democracy protesters in Beijing's Tiananmen Square.
One potential worry is tension between China and Japan, which is unlikely to be resolved in the coming year.
A long-running row over islands claimed by both nations has in recent months escalated to the point where both sides have scrambled fighter jets while patrol ships shadow each other.
"It will be a troublesome situation, with more turbulence expected in the lunar months of April and October," Lai said.
One man to watch will be China's president-in-waiting Xi Jinping, who was born in 1953, a "yin water" year of the Snake like 2013. The same combination comes every 60 years.
"Xi is a typical 'yin water' person - moderate, humble and polite," said Lo, adding that the Year of the Snake may still be a tough one for China's new leader because fire is not a good element for him. (Reporting By Grace Li; Editing by Anne Marie Roantree and Elaine Lies)