Global
22 days ago

European shares steady, with Trump’s inauguration in the spotlight

Pedestrians pass the London Stock Exchange in London, Britain August 15, 2017.
Pedestrians pass the London Stock Exchange in London, Britain August 15, 2017. Photo : REUTERS/Neil Hall/Files

Published :

Updated :

European shares edged up to a near three-month high on Monday, supported by banks and travel stocks, as investors braced for Donald Trump to be sworn in as US president.

The pan-European STOXX 600 (.STOXX) was up 0.1 per cent as of 0952 GMT, after adding more than 2 per cent over the last week.

US stock markets were closed for Martin Luther King Day, keeping trading volumes lighter than usual.

Donald Trump will be sworn in as US president at 12:00 pm ET (1700 GMT) in a highly anticipated global event, with investors’ focus on the raft of executive actions concerning immigration, energy and tariffs that he has pledged to sign on day one.

“Nobody really knows what he will be willing to do and how far he will be going,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.

“European equities are now undecided between the global optimism and soft financial condition expectations as well as the Trump risk.”

Investors have lately been on the edge as they believe Trump’s protectionist policies, including trade tariffs on key trading partners, can prove to be inflationary for the US as well as Europe.

“There is the hope that Trump is coming on the scene with a first punch and he’s going to soften his tone and his next four years won’t look as bad,” Ozkardeskaya said.

The banking index (.SX7P) added 0.7 per cent, the most among all sectors, followed by a 0.4 per cent gain for the travel & leisure index (.SXTP). Utilities (.SX6P) fell 1.1 per cent to limit overall gains.

Meanwhile, German producer prices rose less than expected in December, increasing by 0.8 per cent on the year.

European Central Bank policymaker Robert Holzmann warned the central bank could hurt its credibility if it cuts interest rates when inflation rises faster than anticipated, even temporarily.

The ECB is widely anticipated to trim rates by a quarter point at its next policy meeting on Jan. 30.

The annual gathering of the world’s political, business and financial leaders at the World Economic Forum (WEF) in the Swiss town of Davos is another key event this week.

Among stocks, industrial technology group Hexagon (HEXAb.ST) advanced 1.3 per cent after it appointed Anders Svensson as CEO. Svensson will move from engineering group Konecranes (KCRA.HE), whose shares slipped 4 per cent, where he served as CEO.

Siemens Energy (ENR1n.DE), opens new tab dropped 2.1 per cent, with traders pointing to a downgrade by UBS to “sell.”

Belimo Holding (BEAN.S) advanced 2.8 per cent after the Swiss heating and ventilation solutions maker reported full-year revenue above market expectations.

Share this news