Global stocks surge on French poll relief and Trump tax talk

Global stocks surge on French poll relief and Trump tax talk
Global stocks have hit record highs reflecting investors’ relief at centrist Emmanuel Macron’s victory following the first round of the French presidential election and speculation of President Donald Trump bringing in tax cuts.

In the United States, the Nasdaq Composite Index hit a major milestone of just above 6000, a level not seen since 2000.  The Dow Jones industrial average rose 1.1 per cent.

The boom on Wall Street was also driven by strong profit figures.

“Today is one of the busiest days in terms of corporate earnings releases, with 36 companies reporting before and after the market and so far earnings have been strong,” Michael Antonelli, equity sales trader at Robert W. Baird & Co told MarketWatch.

“While earnings have been driving markets higher, tax cuts would drive multiple expansion and so far it looks like the market is very optimistic on tax cuts.”

While US investors might still be worried about a potential government shutdown on Saturday, their concerns might have eased after Mr Trump backed off on his demand to secure funding for the wall with Mexico this week, clearing the way for lawmakers to strike a deal to avoid a government shutdown on Saturday.

Meanwhile, shares in other markets soared.

European shares measured by the STOXX 600 index surged by 0.4 per cent, adding to the 2.1 percent rise on Monday.

In France, the market was up 0.4 percent, after rising 4.1 percent on Monday in what was the biggest daily gain since August 2012.

Japan’s Nikkei jumped more than 1 percent to a three-week high while South Korea’s KOSPI rose 0.7 percent to its highest level since April 2015.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.6 percent, moving to its highest level since June 2015.

The Euro rose against the dollar and safe haven assets like gold and the yen retreated.

“It’s risk-on. The French presidential election was an obvious risk, and it now looks like, barring a shock, Macron will gallop ahead and the market will have its candidate in place, and that’s another hurdle overcome this year,” BNY Mellon currency strategist Neil Mellor, in London told Reuters.

 



Business First is a peer-to-peer magazine: written by CEOs and other high level executives, with interviews with some of the country’s best leaders.


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