World Stocks on a High as TrumpTradesBounce Back

The Economic Times - - Around The World -

Lon­don: World stocks and bond yields rose on Mon­day, lifted by a re-emer­gence of so-called “Trump trades” as in­vestors bet that the US president’s tax re­form plans will boost eco­nomic growth and cor­po­rate prof­its.

Fol­low­ing on from Fri­day’s record high closes on Wall Street, Asian stocks ral­lied to 1-1/2-year peaks and a broad mea­sure of panEuro­pean stocks hit its high­est since late 2015. The Ja­panese yen was the big­gest un­der­per­former among ma­jor cur­ren­cies, as is typ­i­cal when riskier as­sets such as stocks are do­ing well.

In­vestors were also com­forted by the two-day US-Japan sum­mit held over the week­end ap­par­ently hav­ing ended smoothly with­out President Don­ald Trump talk­ing tough on trade, currency or se­cu­rity is­sues. “Trump-based ref la­tion pric­ing re­mains the ma­jor driver in the US stock mar­kets, and thirsty in­vestors are wait­ing for more de­tails on Trump’s cor­po­rate tax cut plans,” said Ipek Ozkardeskaya, se­nior mar­ket an­a­lyst at Lon­don Cap­i­tal Group. The STOXX 600, Europe’s lead­ing in­dex of top 600 shares, rose 0.6% to 369.51 points, the high­est in over a year. Ger­many’s DAX was up 0.9%, led by a 15% rise in drug­maker Stada af­ter the com­pany said it had re­ceived two of­fers for the ac­qui­si­tion of the com­pany, one of which is pri­vate eq­uity group Cin­ven Part­ners.

MSCI’s broad­est in­dex of Asi­aPaci f ic shares out­side Japan gained 0.5% while Japan’s Nikkei rose 0.4%. US fu­tures pointed to a higher open on Wall Street. The S&P 500, Dow Jones In­dus­tri­als and Nas­daq Com­pos­ite all posted record clos­ing highs on Fri­day. C o mment s f r o m T r u mp o n Thurs­day that he plans to an­nounce what he said would be the most am­bi­tious tax re­form plan since the Rea­gan era in the next few weeks rekin­dled hopes for big tax cuts. Ec onomic d at a f r om ma­jor economies has also been up­beat, i nc lud i n g F r i d ay ’s Chi ne s e trade fig ures while US cor­po­rate ea r ni ngs have been a lso solid so far.

A wo­man car­ries an ef­figy of US President Don­ald Trump dur­ing a march to protest against Trump’s pro­posed bor­der wall and to call for unity, in Mex­ico City on Sun­day — Reuters

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