US woes make markets shake

DOUBTS over pro-business policies and tax reforms to boost the US economy rattled stock market investors yesterday.

President Trump’s ditching of plans to create an advisory group on infrastructure – overseeing a potential $1trillion (£777billion) upgrading of roads, bridges and airports – followed a backlash from business leaders over his comments on white supremacists.

Earlier this week, two other White House business panels were disbanded after an exodus of chief executives and there was speculation over the future of Trump’s top economic adviser, Gary Cohn.

Thursday’s terror attack in Spain accelerated the sell-off of shares around the world, while the flight to safe-haven assets pushed the gold price to a nine-month high testing $1,300 an ounce.

The US dollar weakened further against the euro and has lost 10 per cent of its value against the single currency over the past four months.

Only eight of the UK’s blue chip companies made gains as the FTSE 100 fell by up to 85 points before a partial recovery left it 63.89 lower at 7323.98. Leading German, French and Spanish shares were also well adrift after a 1 per cent fall on markets in Japan and Hong Kong.

Analyst David Madden of CMC Markets UK said: “US political uncertainty is still grinding down investor confidence.

“The Trump administration is looking weaker by the day and as the President hasn’t even begun to ‘make America great again’ investors are losing their patience with him.

“The pro-business policies that helped Mr Trump land the top job are nowhere near from being implemented and at the rate he is going they won’t be.

“Traders are viewing his decision to disband councils as a sign to cut and run from the stock market. It isn’t just big names in business that are walking away from Mr Trump, it is investors too.”

Investment firm The Pure Gold Company said it had seen a 65 per cent increase in first-timers buying physical gold this week “amid concerns about the effect of President Trump’s erratic leadership on global economic and political stability”.