A file photo showing traders on the floor of the New York Stock Exchange during morning trading in New York City, US. (AFP)
London: US and European stock markets pushed higher yesterday as investors tracked earnings and President Donald Trump’s policy plans that are starting to impact the global economy.
However, Hong Kong and Shanghai indices fell yesterday after Trump warned China could be included in a list of countries to be hit with tariffs on February 1.
Meanwhile, the dollar “struggled to find a clear direction and traded in a narrow range as market participants sought clarity on Trump’s trade policies”, noted Joseph Dahrieh, analyst at traders Tickmill.
The latest batch of corporate earnings helped boost sentiment on Wall Street, with the S&P 500 near a record high.
Shares in Netflix soared more than 12 percent after it reported adding almost 19 million subscribers during the holiday season to finish out last year with more than 300 million globally.
And while the inflationary impact of Trump’s tariff plans gave investors cold sweats in December, they are proving more sanguine this week.
“Thus far, the stock market has not found reason to fear the tariff approach for a variety of reasons: it isn’t as onerous as expected at this stage; there hasn’t been a retaliatory tit-for-tat; and there is a belief it is more of a negotiating tactic than an official policy,” said Briefing.com analyst Patrick O’Hare.
A retreat in US government bond yields after last week’s spike has also reassured equities investors.
In Europe, the London and Frankfurt stock markets continued to hit record highs, helped by currency movements.
London’s FTSE 100 index was supported by “a weak pound that allows investors to buy UK companies with international businesses at cheaper prices”, noted Swissquote
Bank senior analyst Ipek Ozkardeskaya.
Plans by the European Central Bank to keep cutting interest rates in the eurozone has weighed on the euro — although both the single currency and pound won back some support yesterday.
Oil prices slid further after having tumbled Tuesday in reaction to Trump’s announcement of a “national energy emergency” to ramp up drilling in the United States.
Traders have been bracing for Trump 2.0 since his re-election in November, with an initial rally — fuelled by hopes for market-boosting measures — giving way to worries he would resume his trade war with Beijing and also target others.