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Trump curbs spook global stock markets

President Trump’s immigration clampdown has increased concerns about the impact of his policies on the global economy and is weighing on stock markets around the world.

After a negative start to the day in the Asia Pacific markets, European bourses followed suit and so too has Wall Street. By mid-day in New York, the Dow Jones Industrial Average had shed 185.40 points to 19,907.18 while the S&P 500 was 1 per cent lower at 2,271.42.

“A new week of trading is getting off on a sour note, as key macro news, Fed action, international and domestic backlash over Trump’s immigration stand are putting investors on the defense,” Peter Cardillo, chief market economist at First Standard Financial, said in a note.

Analysts said that the president’s ban on refugees along with citizens from seven mainly Muslim countries renewed concerns about a trade war with China. “The biggest threat to markets at the moment is if Trump continues down the path of protectionism without focusing on economic policies,” said James Woods, global investment analyst at Rivkin Securities in Sydney.

In London, the FTSE 100 finished 0.9 per cent at 7119.05, with Germany’s DAX and France’s CAC 40 slipping 1.1 per cent and 1.2 per cent respectively.

Tesco and Booker shares fell on reports that their £3.9 billion deal to create the country’s largest food group could face regulatory hurdles despite the company’s insistence that it will not. Both companies lost some of the gains made when the deal was announced on Friday. Tesco fell 4.4 per cent to 197.55p and Booker slid 3.6 per cent to 204.70 in the FTSE 250.

Financial stocks were hit after Unicredit, Italy’s biggest bank, said that its capital ratios would not meet ECB requirements as it seeks €13 billion from a rights issue. Barclays and Old Mutual finished down 3.3 per cent at 223p and 3.7 per cent at 205.31 respectively.

Shares in Rolls-Royce and BAE Systems dropped on reports that ministers have drawn up a new deal on the £41 billion Trident submarine contract that will heap risks and rewards on the two companies. Rolls-Royce fell 3.9 per cent and BAE Systems 1.4 per cent.

It wasn’t all doom and gloom, however. One of the biggest risers on the day was Vodafone, which said that it was in talks to merge its Indian operations with a rival, Idea Cellular, in an all-share deal. The shares closed up 1.3 per cent at 196p. The mobile operator has had a difficult time in India and this deal will take the business off its books.

With the final report by an all-party parliamentary group on the UK gaming sector due, Paddy Power Betfair rose 1.3 per cent to £82. Investec said that it believed that the shares were a “buy” with a price target of £100.

In the mid-caps WS Atkins jumped 5 per cent to £14.69 after a report in The Times that CH2M, the American consulting engineer playing a key role in Britain’s new high-speed rail route, has approached the British engineer about a possible $4 billion merger.

It was not enough to offset the falls in the FTSE 250, which closed down 114.45 points to 18,076.28.

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