World stocks extend rally sparked by Trump tax cut vow
HONG KONG, (AP): World stock markets extended gains on Friday following U.S. President Donald Trump’s promise that he would soon cut taxes for businesses.
KEEPING SCORE: European shares opened higher. Germany’s DAX added 0.4 percent to 11,692.55 and France’s CAC 40 rose 0.2 percent to 4,834.93. Britain’s FTSE 100 climbed 0.5 percent to 7,267.69. U.S. benchmarks were poised to rise, with Dow futures rising 0.2 percent to 20,170.00 and broader S&P 500 futures gaining 0.1 percent to 2,307.00.
TRUMP ON TAXES: In a meeting with airline and airport executives, Trump vowed to roll back government regulations and said he would announce a plan in the next three weeks to reduce taxes for businesses. The comments were short on details, but encouraged investors who have been waiting to see how Trump follows through on campaign promises to boost economic growth.
THE QUOTE: “Ever since his victory in November, global stock markets have been steered by actions and rhetoric emanating from the new commander-in-chief,” said Nicholas Teo of KGI Securities in Singapore. “The trigger event of last night’s jump clearly shows the willingness of the markets to give the man lots of ‘slack’, extending Mr. Trump more time to execute his election promises.”
MR. ABE GOES TO WASHINGTON: Markets are awaiting the outcome of Japanese Prime Minister Shinzo Abe’s meetings with Trump on Friday and the weekend. Japanese companies, worried about Trump’s complaints over trade and exchange rates, hope Abe can get him to buy into a job creation and investment package.
CHINA TRADE: Strong January trade data from China brightened investor sentiment. Exports rebounded, expanding nearly 8 percent while imports jumped 16.7 percent. The figures are a good sign for the world’s No. 2 economy, but could also be distorted as factories closed for the Lunar New Year holiday, which falls at different times in the first two months of the year.
ASIA’S DAY: Japan’s benchmark Nikkei 225 index surged 2.5 percent to close at 19,378.93 as the yen weakened against the dollar, lifting shares of exporters. South Korea’s Kospi added 0.5 percent to 2,075.08 and Hong Kong’s Hang Seng rose 0.2 percent to 23,574.98. The Shanghai Composite in mainland China gained 0.4 percent to 3,196.70 and Australia’s S&P/ASX 200 jumped 1 percent to 5,720.60.
CURRENCIES: The dollar was trading at 113.64 yen up from the 112.20 level it was trading at 24 hours earlier. The euro weakened to $1.0641 from $1.0653.
ENERGY: Benchmark U.S. crude slipped 1 cent to $52.99 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 66 cents, or 1.3 percent, to close at $53 a barrel on Thursday. Brent crude, the benchmark for international oil prices, gained 4 cents to $55.67 a barrel in London.