Wednesday 19 September 2018

Shares slip as hopes fade for US tax deal

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York
Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York

Reuters

European shares slipped yesterday as cyclical stocks fell, while dwindling enthusiasm over a US tax bill weighed on financial service providers.

The pan-European STOXX 600 index, fresh from its best day in six weeks, fell 0.2pc, as weak financials and healthcare shares outweighed a rally in consumer staples and utilities, while tech stocks rebounded, tracking US peers.

Consumer stocks Danone and Diageo both rose 0.7pc gained, while utilities Enel and E.ON also advanced by around 1pc.

"It's been noticeable there has been a distinct sector rotation over the last week which is impacting the momentum of the market," wrote Deutsche Bank strategist Jim Reid in a note.

Eurozone banks slipped after their best gains in two months, falling 0.5pc. Santander, BNP Paribas and Deutsche Bank were among those losing ground after gaining in the previous session.

UBS analysts noted that although lower taxes on future US earnings would help European banks, US banks would benefit more, giving them a competitive advantage.

British sub-prime lender Provident Financial fell 10.2pc after UK regulator FCA opened an investigation into its Moneybarn unit.

Chipmakers led tech stocks higher after a volatile session that saw the sector hit by profit-taking in morning.

Dialog Semiconductor rose 3.5pc, rebounding after a three-day drop of 40pc on fears Apple would in-source its chip production.

Infineon and STMicro both rose more than 1.5pc, while iPhone supplier Ams - the best-performing European stock of 2017 - edged up 0.6pc. The sector turned higher as technology stocks in the US recovered from a two-day sell-off.

Irish Independent

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