Global stocks mostly higher as dealers brush off Trump fear

Dhaka,  Sun,  24 September 2017
Published : 24 Aug 2017, 16:57:42

Global stocks mostly higher as dealers brush off Trump fear

World stock markets mostly advanced Thursday, with analysts playing down US President Donald Trump's government shutdown threat as they looked ahead to a key central bankers' meeting.

European indices made solid gains following advances across much of Asia, as investors brushed off Wednesday's losses on Wall Street.

London's benchmark FTSE 100 index was up 0.4 per cent nearing midday, while the pound recovered from two-month lows versus the dollar as traders reacted to official data confirming that Britain's economy grew 0.3 in the second quarter despite high inflation and uncertainty over Brexit, reports AFP.

"The pound fell initially after the data but quickly recovered to trade off its lows just below 1.28 against the dollar," noted Craig Erlam, senior market analyst at Oanda trading group.

Among individual share prices, troubled UK lender Provident Financial continued its recovery, surging 20 per cent after losing two-thirds of its value Tuesday on a profits-warning.

Across the Atlantic, Trump on Wednesday warned in a firebrand speech to supporters that he was ready to shut down federal business to force Congress to pay for his controversial Mexican border wall, while also threatening to tear up a trade agreement with Canada and Mexico.

The outburst fuelled concerns that the nascent administration is struggling to find consensus on Capitol Hill -- even with its own Republican party -- raising questions about Trump's ability to push through promised tax cuts, deregulation and infrastructure spending.

It led also to a warning from Fitch that it would review its US sovereign rating if the government was shut down.

Hikaru Sato, senior technical analyst at the investment strategy section of Daiwa Securities, said: "Trump's remarks are likely to keep impacting the markets for now -- at least until Congress resumes."

All three main indices in New York ended in the red.

The losses only partly fed through to Asia, where Hong Kong ended up 0.4 per cent -- a third successive gain as traders returned to work after Wednesday's typhoon.

Sydney rose 0.1 per cent, Singapore was 0.4-per cent higher and Seoul put on 0.4 per cent, while there were also gains in Taipei.

However, Tokyo eased 0.4 per cent on the back of a stronger yen, while Shanghai closed down 0.5 per cent.

Attention is now on the Jackson Hole symposium in Wyoming where the world's top bankers are gathering with US Federal Reserve boss Janet Yellen and European Central Bank chief Mario Draghi.

With the US and eurozone economies both picking up, dealers are hoping for some pointers about the future of monetary policy.

The euro has rallied in recent weeks -- hitting a near eight-year high against sterling -- with the ECB expected at some point to start winding in its massive stimulus, while another round of upbeat economic data Wednesday ramped up those expectations.

"The market is paying close attention to the planned speeches by... Yellen and... Draghi for clues and any significant remark as central banks move toward scaling back their easy monetary policies," Mizuho Bank said in a note.

"But now that minutes of the ECB's policy meeting have shown that policymakers have voiced concerns about the euro's strength, many people believe (Draghi) would avoid making significant remarks."
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