European stocks buoyed by Trump tax plan

The dollar is pressing higher again after Donald Trump unveiled a long-awaited tax cut plan
AFP

London (AFP) – Europe’s stock markets shifted higher Thursday, with sentiment buoyed after US President Donald Trump unveiled market-friendly tax cut plans.

However, Asian indices struggled to track Wall Street gains, despite a broad move back to riskier assets like equities.

“It was a slow start this Thursday, the markets having little to process beyond last night’s Trump tax plan reveal,” said Spreadex analyst Connor Campbell, who also sounded a note of caution.

“Though Trump’s tax announcement was an important first step in terms of the President delivering on one of his most market-pleasing policies, the abject failure of the Republican attempt to repeal Obamacare means that investors are wise to be cautious about getting too excited at this early stage.”

After months of waiting, Trump released a tax reform blueprint that would slash corporate rates, provide relief for firms that repatriate cash from overseas, and reduce the number of tax brackets from seven to three. 

The tycoon described it as “the largest tax cut, essentially, in the history of our country”.

House Speaker Paul Ryan said it was “a once-in-a-lifetime opportunity that is all about more jobs, fairer taxes and bigger pay checks for American families”.

Trump’s promise to reduce taxes, ramp up infrastructure spending and slash red tape helped drive a global market rally in the months after his November election win.

But those gains fizzled as his legislative agenda suffered a series of blows and his White House has become embroiled in a host of crises.

The bill is expected to face a tough passage through Congress, with both sides of the aisle likely to question its affordability, while it received a mixed review from economists, and business and union leaders.

 – Eyes on Iraq – 

Oil market investors are meanwhile keeping tabs on events in the Middle East after Kurds overwhelmingly voted for independence from Iraq, which has sparked fears of a crackdown by Baghdad and possible military confrontation.

The vote led Iraq’s leaders to threaten to take over oil fields in the region, while Turkey said it would cut off exports.

Greg McKenna, chief market strategist at AxiTrader, described the situation as “something to watch geopolitically and for oil traders as the market tightens up”.

– Key figures around 1030 GMT – 

London – FTSE 100: UP 0.1 percent at 7,321.64 points 

Frankfurt – DAX 30: UP 0.3 percent at 12,699.21

Paris – CAC 40: UP 0.2 percent at 5,279.36

EURO STOXX 50: UP 0.3 percent at 3,564.67

Tokyo – Nikkei 225: UP 0.5 percent at 20,363.11 (close)

Hong Kong – Hang Seng: DOWN 0.8 percent at 27,421.60 (close)

Shanghai – Composite: DOWN 0.2 percent at 3,339.64 (close)

New York – DOW: UP 0.3 percent at 22,340.71 (close)

Euro/dollar: DOWN at $1.1767 from $1.1745 at 2100 GMT

Dollar/yen: UP at 112.80 yen from 112.79 yen 

Pound/dollar: DOWN at $1.3364 from $1.3387

Oil – Brent North Sea: UP 37 cents at $58.27 per barrel

Oil – West Texas Intermediate: UP 54 cents at $52.68

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