European equities falter, eyes on Trump


LONDON — Europe’s main stock markets faltered on Wednesday, having rallied this week on French election news, but the euro scored a near five-month high against the dollar. Financial markets were electrified by news that centrist Emmanuel Macron had triumphed over far-right candidate Marine Le Pen in the first round of France’s presidential election over the weekend. Global shares soared Monday and rose further Tuesday after Macron topped the initial vote and appeared well on course to beat Le Pen on May 7. Asian stocks then rallied Wednesday for a fourth day following another record close on Wall Street, with investors optimistic before U.S. President Donald Trump’s promised announcement of much-vaunted tax reforms. The positive sentiment was also boosted by a slight easing of tensions over North Korea and hopes a feared shutdown of the U.S. government can be averted, after Trump appeared to soften his stance on congressional funding for his Mexican border wall. However, in Europe on Wednesday, equities appeared to run out of steam on the eve of an interest rate call from the European Central Bank.

“The bounce in equity markets appears to have exhausted itself for now, at least in Europe,” noted Chris Beauchamp, analyst at IG trading group.“Today is meant to see the unveiling of a new U.S. corporation tax plan, and when that is combined with the ECB meeting tomorrow, the effect is to keep markets pinned down.” In foreign exchange activity however, the euro jumped to US$1.0951 in morning London deals — striking the highest level since early November 2016.

The shared unit was bolstered by French election news, and reports that the ECB could start to wind down its monetary easing programme as eurozone economies continue to improve. “The latest polls from the French election put Macron ahead by 20 and 21 points, according to two surveys by Ifop,” noted City Index analyst Kathleen Brooks. “This, along with some expectation that the ECB may ditch its dovish slant at its meeting tomorrow, has helped drive the euro higher.” Back in Asia on Wednesday, Tokyo’s Nikkei ended up 1.1 percent, while Hong Kong was 0.5 percent higher, its fifth straight day of gains. Asian traders were given a strong lead from Wall Street, where the Nasdaq broke through the 6,000 points marker for the first time and the Dow jumped on strong earnings reports. Key Figures at 1015 GMT London – FTSE 100: DOWN 0.1 percent at 7,272.27 points Frankfurt – DAX 30: DOWN at 0.1 percent at 12,459.50 Paris – CAC 40: UP 0.1 percent at 5,280.59 EURO STOXX 50: DOWN 0.2 percent at 3,575.40 Tokyo – Nikkei 225: UP 1.1 percent at 19,289.43 (close) Hong Kong – Hang Seng: UP 0.5 percent at 24,578.43 (close) Shanghai – Composite: UP 0.2 percent at 3,140.73 (close) New York – Dow: UP 1.1 percent at 20,996.12 (close) Euro/dollar: DOWN at US$1.0901 from US$1.0934 at 2100 GMT Pound/dollar: DOWN at US$1.2817 from US$1.2835 Dollar/yen: UP at 111.21 yen from 111.12 yen Oil – Brent North Sea: UP 12 cents at US$51.98 per barrel Oil – West Texas Intermediate: UP 12 cents at USUS$49.35