Global stocks up after Wall Street gains on tax cut hopes
BEIJING (AP) — Global stock markets were mostly higher Tuesday after Wall Street gained on growing investor certainty that U.S. lawmakers will approve tax changes.
KEEPING SCORE: In early trading, Germany’s DAX rose 0.1 percent to 13,326.48 points and London’s FTSE 100 advanced 0.2 percent to 7,551.58. France’s CAC 40 lost 1.4 points to 5,419.14. On Monday, the DAX rose 1.6 percent, the CAC 40 climbed 1.3 percent and the FTSE 100 added 0.6 percent. On Wall Street, the future for the Dow Jones industrial average rose 0.1 percent and that for the Standard & Poor’s 500 index was little-changed.
ASIA’S DAY: The Shanghai Composite Index rose 0.9 percent to 3,296.54 while Tokyo’s Nikkei 225 shed 0.2 percent to 22,868.00. Hong Kong’s Hang Seng advanced 0.7 percent to 29,253.66 and Seoul’s Kospi declined 0.1 percent to 2,478.53. Sydney’s S&P-ASX 200 gained 0.5 percent to 6,071.80 and India’s Sensex added 0.5 percent to 33,767.74. Benchmarks in New Zealand, Bangkok and Jakarta rose while Singapore and Taiwan declined.
TAXES: Congressional Republicans appeared to garner enough support to approve changes that initially would cut taxes for most Americans but by 2027 would increase the burden for most. The House of Representatives was scheduled to vote Tuesday and the Senate on Wednesday. Most of the benefits go to businesses and the wealthy, which Republicans say would goose the economy and benefit all. The Congressional Budget Office estimates the cuts will widen the government’s budget deficit by $1.45 trillion.
ANALYST’S TAKE: The dollar weakened against other major currencies because “market participants doubt the impact on the economy,” said Mizuho Bank in a report. “Firstly, the tax bill is expected to widen fiscal deficit,” said Mizuho. “Secondly, the pro-cyclical nature of the fiscal impulse at a time when the economy is close to full employment also raises questions (about) the necessity of an expansionary fiscal stance at a ‘late cycle’ stage.”
SOUP & SNACKS: Two major food companies agreed to buy smaller snack makers: Campbell Soup plans to purchase pretzel maker Snyder’s-Lance for $4.87 billion and Hershey will buy Amplify Snack Brands for $1.2 billion.
CURRENCY: The dollar held steady at 112.58 yen. The euro rose to $1.1811 from $1.1781.
ENERGY: Benchmark U.S. crude rose 33 cents to $57.55 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 11 cents on Monday to $57.22. Brent crude, used to price international oils, added 19 cents to $63.60 in London. It added 18 cents the previous session.