LONDON: Europe’s main stock markets ended the session slightly higher on Wednesday (Sep 13), shrugging off weaker prices on Wall Street, as they were buoyed by a slight softening of the euro, dealers said.
Nevertheless, sentiment was subdued as investors took a breather from the previous day’s record close on Wall Street and digested mixed reactions to Apple’s latest iPhone product launches.
Wall Street was weaker as US data showed inflation remained tepid, potentially denting the odds of further Federal Reserve interest rate hikes, dealers said.
“Bullishness may have waned … but equities are well off their worst levels, back closer to break-even for the day,” said Accendo Markets analyst Mike van Dulken.
The strength of sterling was continuing to hamper the FTSE, “but the currency is back from its highs following underwhelming UK wages growth,” the expert said.
ThinkMarkets analyst said traders were sceptical about Trump’s tax reforms.
Trump hit the road to sell reform of America’s “self-destructive” tax code, a major campaign pledge that remains short on detail and a long way from becoming law.
The president visited Springfield, Missouri, hoping to pull voters and lawmakers behind what he described as a “once in a generation” opportunity.
Advocating a 15 per cent corporate tax rate, and a slew of other reforms, Trump insisted “our self-destructive tax code cost millions of jobs, trillions of dollars, and billions of hours spent on compliance and paper work.”
He has argued that ambitious reform of the tax code is needed to juice the economy further, and is counting on the Republican-controlled Congress to make that ambition reality.
“It appears there is still a lack of compromise between lawmakers about how to position tax cuts without adding to the budget deficit and to the debt burden,” cautioned Rabobank analyst Jane Foley.
“Trump has indicated that he would like to engage members of the Democrat party to support his bid to revise tax policies. However, this would clearly water down the objectives of some Republican Party members.”
Across in Asia on Wednesday, investors eased off the pedal while the dollar held steady.
IPHONE X PRICE WORRIES
Apple suppliers were mixed after the US tech titan unveiled its long-awaited iPhone X and two other models.
Apple stock had ended lower in New York overnight as investors appeared somewhat underwhelmed.
“Although the new iPhone is seen as the future of the smartphone … its price tag will certainly be a drag on its accessibility to a large pallet of consumers, especially when it comes to the biggest growth potential markets such as emerging Asia,” said London Capital Group analyst Ipek Ozkardeskaya.
The new iPhone X will retail at a hefty US$999 in the United States, and will be available from Nov 3 in more than 50 markets.
Global markets had mostly climbed on Tuesday on relief that Hurricane Irma did not hammer Florida as badly as feared, and on easing North Korea concerns.
However, Pyongyang attracted renewed attention when it vowed on Wednesday to accelerate its weapons drive after “evil” UN Security Council sanctions.
Key figures around 1545 GMT:
New York – DOW: FLAT at 22,115.56 points
London – FTSE 100: DOWN 0.3 per cent at 7,379.70 (close)
Frankfurt – DAX 30: UP 0.2 per cent at 12,553.57 (close)
Paris – CAC 40: UP 0.2 per cent at 5,217.59 (close)
EURO STOXX 50: UP 0.3 per cent at 3,523.14 (close)
Tokyo – Nikkei 225: UP 0.5 per cent at 19,865.82 (close)
Hong Kong – Hang Seng: DOWN 0.3 per cent at 27,894.08 (close)
Shanghai – Composite: UP 0.1 per cent at 3,384.15 (close)
Euro/dollar: DOWN at US$1.1894 from US$1.1949
Dollar/yen: UP at 110.64 yen from 110.25 yen
Pound/dollar: DOWN at US$1.3217 from US$1.3252
Oil – Brent North Sea: UP 57 cents at US$54.84 per barrel
Oil – West Texas Intermediate: UP 75 cents at US$48.98