Stock mar­kets’ wel­come for Trump tax plans fades

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LON­DON: A re­bound in sen­ti­ment af­ter US Pres­i­dent Don­ald Trump un­veiled mar­ket-friendly tax cut plans proved short-lived as Wall Street stocks opened lower on Thurs­day.

In Europe, eq­ui­ties were mixed in mid­day trad­ing, while Asian in­dices strug­gled to track Wall Street’s Wed­nes­day gains, de­spite a broad move back to riskier as­sets like eq­ui­ties.

“US stocks are lower in early ac­tion, com­ing off the mod­est re­bound yes­ter­day, with the mar­kets grap­pling with in­creased Fed rate hike ex­pec­ta­tions and scru­tiny of yes­ter­day’s re­lease of tax re­form de­tails,” said an­a­lysts at Charles Sch­wab stock bro­ker­age.

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.

“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,” said Spreadex an­a­lyst Con­nor Camp­bell.

The lower open on Wall Street came de­spite the Com­merce De­part­ment re­vis­ing up its es­ti­mate for growth by the US econ­omy by a tenth of a per­cent­age to 3.1 per­cent in the April-june pe­riod on an an­nu­alised ba­sis.

Wall Street stocks re­treated early Thurs­day as some of the eu­pho­ria from the re­lease of Pres­i­dent Don­ald Trump’s tax cut pro­posal started to fade.

Stocks had ral­lied on Wed­nes­day as Trump and Repub­li­can lead­ers re­leased a long-awaited out­line of a pro­posal to cut the cor­po­rate tax rate from 35 per­cent to 20 per­cent amid a broader over­haul of the sys­tem.

A cur­rency trader works at the for­eign ex­change deal­ing room of the KEB Hana Bank head­quar­ters in Seoul, South Korea, on Thurs­day.

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