AFP, LONDON: European stock markets rebounded yesterday following a late recovery on Wall Street and a record-winning streak by Tokyo. Approaching midday, London’s benchmark FTSE 100 index was up 0.2 per cent compared with Thursday’s closing level. In the eurozone, Frankfurt’s DAX 30 index won 0.2 per cent and the CAC 40 in Paris advanced by the same amount.
Spain’s IBEX 35 index was fractionally higher, while the euro dropped versus the dollar—the latter benefitting from hopes for US President Donald Trump’s tax cut plans according to traders.
US indices had been in the red for most of Thursday, but the Dow and S&P 500 managed to eke out gains at the close to reach fresh record-highs.
Tokyo’s benchmark stock index meanwhile closed higher Friday, posting its longest winning streak in nearly six decades.
The Nikkei 225 inched up 0.04 percent to end at 21,457.64 points, rising for the 14th day straight to match a record set in 1961.
In Europe, markets in London, Frankfurt, Paris and Madrid all retreated Thursday as Spain said it would start seizing some of the Catalan regional government’s powers after the region’s leader warned he could declare independence.
The crisis has sparked concerns about one of the European Union’s biggest economies and Madrid has already cut its growth forecast for next year owing to the crisis.
European markets were being affected also by deadlocked Brexit talks between the EU and British officials, according to traders.
A succession of strong earnings and economic indicators has fuelled optimism on trading floors in recent weeks, with Wall Street’s three main indices continuously hitting records.
However, there is chatter that it may be time to take a breather with a number of key issues on the horizon including the choice of a new Federal Reserve boss.
Warning
Treasury chief Steven Mnuchin warned this week that markets could see a correction if US lawmakers fail to pass the president’s tax-cut measures.
But Trump’s promise to pass the legislation moved a step closer when senators on Thursday agreed a budget resolution that unlocks a procedure allowing Republicans to push through such measures without the need for votes from Democrats.
Trump hailed the vote as “an important step in advancing the administration’s pro-growth and pro-jobs legislative agenda”.
Expectations the tycoon’s tax cuts and big
spending plans would boost the economy were one of the drivers of a months-long global markets rally that kicked off after his November election, though a series of White House crises and legislative setbacks pared those gains.
While the controversial proposals still have a long way to go before being passed, the news spurred Asian markets to life Friday after a plodding start to the day, while the dollar strengthened also against the yen.