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Markets move higher on trade deal euphoria
NEW YORK, Aug 30, 2018 (BSS/AFP) – Wall Street forged further into record
territory on Wednesday as Canada and the United States signaled they were
closing in on a deal to remake the North American free trade pact.
European and Asian stocks also mostly rose.
US President Donald Trump joined Canadian Prime Minister Justin Trudeau in
suggesting a deal was possible this week.
Good economic news also buoyed stocks after the Commerce Department
reported US GDP grew 4.2 percent in the second quarter, even stronger than
initially reported due to a bump in business investment.
The broad-based S&P 500 and Nasdaq, led by a rally in tech stocks, then
popped their fourth straight set of record closes.
Adam Sarhan of 50 Park Investments told AFP the recent bullish trend
reflected the combination of strong corporate earnings, robust economic
growth, tax cuts and fiscal stimulus.
“We have a very bullish fundamental backdrop, which has warranted higher
stock prices,” he said.
– Post-Brexit deal –
But Peter Cardillo of Spartan Capital Securities said Wednesday’s upward
momentum was largely due to “hopes of a breakthrough in the Canadian trade
talks.”
In Europe, markets were affected by the European Union’s top negotiator
saying the bloc was willing to strike an “ambitious” deal with post-Brexit
Britain far beyond any agreements made with other countries in the past.
The main stock indices in Paris and Frankfurt both flipped higher after
the announcement and closed the day 0.3 percent higher.
The pound spiked higher, gaining over one cent to climb over $1.30. But as
a stronger pound depresses earnings of many London-listed firms who make most
of their sales abroad, the FTSE-100 ended the day 0.7 percent lower.
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“Strength in the pound, despite reports an October deadline for Brexit
divorce talks is dissolving into a November deadline, saw FTSE 100 shares
back off from a two-week high,” said Jasper Lawler, head of research at
London Capital Group.
Meanwhile, the Turkish lira tumbled to its lowest value against the US
dollar in two weeks, despite Ankara’s attempts to reassure investors after
Moody’s downgraded its credit ratings on 20 Turkish financial institutions.
The lira was trading at 6.47 to the dollar around 2100 GMT, down from
around 6.27 at the close of Tuesday. It also fell against the euro.
Lawler noted that Turkish bank shares fell alongside the lira on the
Moody’s rating action.
“It is going to be increasingly difficult to get business done in Turkey
under US sanctions and banks are the obvious pressure point in markets,” he
said.
– Key figures around 2100 GMT –
New York – Dow Jones: UP 0.2 percent at 26,124.57 points (close)
New York – S&P 500: up 0.6 percent at 2,914.04 (close)
New York – Nasdaq: UP one percent at 8,109.69 (close)
London – FTSE 100: DOWN 0.7 percent at 7,563.21 (close)
Frankfurt – DAX 30: UP 0.3 percent at 12,561.68 (close)
Paris – CAC 40: UP 0.3 percent at 5,501.33 (close)
EURO STOXX 50: UP 0.3 percent at 3,456.13 (close)
Tokyo – Nikkei 225: UP 0.2 percent at 22,848.22 (close)
Hong Kong – Hang Seng: UP 0.2 percent at 28,416.44 (close)
Shanghai – Composite: DOWN 0.3 percent at 2,769.29 (close)
Euro/dollar: UP at $1.1709 from $1.1698 at 2100 GMT
Pound/dollar: UP at $1.3028 from $1.2896
Dollar/yen: UP at 111.68 yen from 111.07 yen
Oil – Brent Crude: UP $1.19 cents at $77.14 per barrel
Oil – West Texas Intermediate: UP 98 cents at $69.51
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