Min­ers trim sec­ond weekly gain

Malta Independent - - BUSINESS & FINANCE -

The Stoxx Europe 600 In­dex trimmed its weekly gain to 0.6 per­cent. The Euro­pean Cen­tral Bank pres­i­dent said the re­cov­ery isn’t strong enough yet and the cur­rent level of mon­e­tary sup­port is key. Min­ers de­clined with met­als, while bond prox­ies such as util­i­ties and tele­com com­pa­nies dropped as global bonds headed for their big­gest two-week slide in at least 26 years.

While Euro­pean eq­ui­ties climbed for a sec­ond week, the mar­ket has been hit by large in­tra­day swings. The Stoxx 600 has al­ter­nated be­tween gains and losses dur­ing mar­ket ses­sions for nine straight days, its long­est streak in two years. Af­ter the ini­tial rally that fol­lowed Don­ald Trump’s pres­i­den­tial win, the gauge has failed to keep its mo­men­tum.

Last week’s U.S. vote has dom­i­nated mar­ket moves in re­cent ses­sions, with in­vestors betting on in­dus­tries Trump’s pol­icy stances could af­fect. Spec­u­la­tion he will spend more on in­fra­struc­ture had buoyed com­mod­ity stocks, while lenders surged on op­ti­mism he may ease reg­u­la­tory over­sight.

The Trump-trade has dom­i­nated mar­kets this week. The dol­lar is poised for its best rally in more than 15 years against the yen and bonds around the world were on course for their big­gest two-week loss in at least 26 years. Cen­tral banks in Asia were com­pelled to take steps to shore up their cur­ren­cies, while the green­back’s strength also weighed on com­modi­ties. Gold tum­bled to the low­est in more than five months with a drop of 1.1 per­cent to $1,202.96 an ounce.

Spec­u­la­tion the Fed­eral Re­serve will raise in­ter­est rates more rapidly than had pre­vi­ously been thought priced into fi­nan­cial mar­kets. In her first pub­lic state­ment since the vote, Fed Chair Janet Yellen told law­mak­ers on Thurs­day that the cen­tral bank is close to boost­ing bor­row­ing costs. Spec­u­la­tion that Trump’s new ad­min­is­tra­tion will in­crease fis­cal stim­u­lus was al­ready bol­ster­ing bets on fur­ther hikes in 2017.

This ar­ti­cle was compiled byVal­letta Fund Man­age­ment Lim­ited, a mem­ber of the BOV Group.Val­letta Fund Man­age­ment,TG Com­plex, Suite 2, Level 3, Brew­ery Str., Mriehel BKR 3000 Freep­hone: 80072344. E-mail: in­fovfm@bov.com. Web­site: www.vfm.com.mt. Val­letta Fund Man­age­ment Lim­ited is li­censed by the MFSA.

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