Tuesday 23 January 2018

Markets lifted as 'Trump trades' return

A TV monitor showing US President Donald Trump and Japanese Prime Minister Shinzo Abe is seen next to another monitor showing the Japanese yen's exchange rate against the US dollar at a foreign exchange trading company in Tokyo
A TV monitor showing US President Donald Trump and Japanese Prime Minister Shinzo Abe is seen next to another monitor showing the Japanese yen's exchange rate against the US dollar at a foreign exchange trading company in Tokyo
Donal O'Donovan

Donal O'Donovan

World stocks and bond yields rose yesterday, lifted by a re-emergence of so-called 'Trump trades' as investors bet that the US president's tax plans will boost growth and corporate profits.

Following on from Friday's record high closes on Wall Street, Asian stocks rallied to one-and-a-half-year peaks and a broad measure of pan-European stocks hit its highest since late 2015.

The Japanese yen was the biggest under-performer among major currencies, as is typical when riskier assets such as stocks are doing well. Investors were also comforted by the two-day US-Japan summit over the weekend apparently having ended smoothly.

"Trump-based reflation pricing remains the major driver in the US stock markets, and thirsty investors are waiting for more details on Trump's corporate tax cut plans," said Ipek Ozkardeskaya, senior market analyst at London Capital Group.

The STOXX 600, Europe's leading share index, rose 0.75pc to 370.13 points, the highest in more than a year. Mining and basic resources sectors were among the leaders.

In Dublin, the Iseq rose more than 1pc at 6,550.59. Oil and gas names were generally higher. Aryzta, which had seen shares hammered in recent weeks, was also a big gainer. Its shares rose 4.75pc to €27.81.

Market heavyweight Kerry gained 2.27pc to €68.42 a share, and insurer FBD, tipped as a potential takeover target, was up 1.84pc to €8.40 a share.

On the flip side, house builder Abbey fell 3.72pc to €14.25 a share despite record average house prices recorded in its main UK market.

Elsewhere, Germany's DAX was up 0.9pc, led by drug maker Stada after it confirmed two takeover offers, one from Cinven Partners.

Additional reporting by Reuters

Irish Independent

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