European stocks catch Wall Street bounce

European stocks catch Wall Street bounce

LONDON: European stock markets recovered from their lows on Thursday (Dec 21), helped by a bounce on Wall Street which was pleased with progress on US President Donald Trump's tax reform bill, dealers said.

Trading volumes began to thin out with many investors away for an extended festive break for Christmas and New Year holidays.

Wall Street rose at the opening bell after dipping overnight as the House of Representatives approved a sweeping US tax cut and sent the long-awaited measure to Trump's desk.

"The bullish sentiment has returned to Wall Street somewhat as traders picked up some of the stocks that retreated on the back of the tax reforms being passed," said market analyst David Madden at CMC Markets UK.

"The confirmation the US approved a US$1.5 trillion tax reform yesterday was met with little enthusiasm, largely because it was priced in for some time," he added.

The Dow was up 0.5 per cent in late morning New York trading.

Global equities have had a good year, with Wall Street enjoying a record-breaking run in anticipation of business-friendly tax reform.

Those gains increased over the past week as it became clear that months of bargaining would bear fruit following the successful passage of Trump's tax reform bill through Congress.

In the US, the tax vote in the lower congressional chamber was the last major hurdle before the controversial US$1.5 trillion tax overhaul is signed into law by Trump. Wall Street has viewed the measure as Washington's most important priority since the 2016 US election.

"President Trump finally has a piece of legislation passed. There has already been a lot of optimism priced in," said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers. "We may see a bit of profit-taking coming into the back end of the year."

Some profit-taking occurred late Wednesday on Wall Street and in early European trading on Thursday.

But Frankfurt and Paris reversed an early loss-making trend, while London built on earlier modest gains to strike a new all-time high above 7,600 points.

"The FTSE 100 is the standout performer in Europe as it reached a fresh all-time high," said CMC Markets UK's David Madden.

"Since consumer goods like Reckitt Benckiser, Diageo and Tesco are some of the biggest risers on the day, the Santa rally is certainly underway," he added.

The FTSE 100 ended the day with a gain of nearly 1.1 per cent to 7,603.98 points.

Paris stocks rose 0.6 per cent and Frankfurt added 0.3 per cent.

In Asia, Tokyo ended 0.1 per cent lower but Hong Kong rose 0.5 per cent and Shanghai gained 0.4 per cent higher as dealers welcomed a pledge by China's leaders to boost imports.

Key figures around 1630 GMT:

New York - DOW: UP 0.5 per cent at 24,843.09 points

London - FTSE 100: UP 1.1 per cent at 7,603.98 (close)

Frankfurt - DAX 30: UP 0.3 per cent at 13,109.74 (close)

Paris - CAC 40: UP 0.6 per cent at 5,385.97 (close)

EURO STOXX 50: UP 0.5 per cent at 3,569.60

Tokyo - Nikkei 225: DOWN 0.1 per cent at 22,866.10 (close)

Hong Kong - Hang Seng: UP 0.5 per cent at 29,367.06 (close)

Shanghai - Composite: UP 0.4 per cent at 3,300.06 (close)

Euro/dollar: UP at US$1.1877 from US$1.1871 at 2200 GMT

Pound/dollar: DOWN at US$1.3366 from US$1.3376

Dollar/yen: UP at 113.42 yen from 113.40 yen

Oil - Brent North Sea: UP three cents at US$64.59 per barrel

Oil - West Texas Intermediate: UP nine cents at US$58.18

Source: AFP/de

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