World shares off as US tax bill passes

london — World stock markets wavered just below recent record highs while US Treasury yields held near multi-month peaks on Thursday as the final procedural throes of long-awaited US tax reform played out in Washington.

The Republican-led US Senate approved the sweeping $1.5 trillion tax bill in the early hours of Wednesday. A re-vote by the House of Representatives was scheduled for later in the day, with approval expected, and the bill will then go to President Donald Trump to sign into law.

European stock markets nudged lower, with blue-chip indexes in Germany, France and Britain flat to a touch weaker on the day.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan bobbed lower in a choppy session, while Japan’s Nikkei index finished up 0.1 per cent.

MSCI’s world equity index, which tracks shares in 47 countries, was little changed and holding just below record highs hit on Monday.

US Treasury yields, which notched up their biggest one-day jump in almost three months on Tuesday as the tax bill moved towards passage, steadied at around 2.46 per cent — holding near the previous day’s highs.

“Last week, the reaction of bond markets was one of ambivalence about the likelihood of these measures getting passed,” said Michael Hewson, chief market analyst at CMC Markets in London. “However, US yields have jumped sharply higher in the last two days as the prospect of higher inflation and growth prompted some positioning adjustments in anticipation that the measures, if passed, could prompt conditions that might see rates have to rise faster than expected next year.”

Republicans, who control both lawmaking chambers, said their tax plan would boost consumer spending and business investments, while independent government estimates showed the proposed tax cuts would end up adding at least $1 trillion to the $20 trillion national debt in 10 years. —