European and US stock markets rose following a report Monday the incoming Trump administration will apply tariffs only on certain sectors, while the dollar was mostly lower against rival currencies.While Wall Street soared after Donald Trump’s election on expectations of tax cuts and deregulation, concerns about his plans to impose hefty tariffs on imports from China and other key trade partners have moved to the forefront.However, the Washington Post reported Monday that instead of a universal tariff on everything imported into the United States, which Trump had advocated as a candidate, his aides are preparing plans to apply tariffs to goods in certain critical sectors.”Stocks have made solid gains around the world today on hopes that the incoming US administration will look to take a more targeted approach on tariffs than previously feared,” said Chris Beauchamp, Chief Market Analyst at online trading platform IG.Trump quickly disputed the Washington Post report, posting on his Truth Social platform that the story “incorrectly states that my tariff policy will be pared back”.Still, stock markets moved higher.Applying a 10 or 20 percent tariff on all goods imported into the United States, or even up to 60 percent on goods from China, threated to reignite inflation and squelch demand, causing disarray in the global economy.Kathleen Brooks, research director at XTB trading platform, noted that while it is not clear exactly which critical sectors would be subject to tariffs, “it is still no wonder that investors are taking a sigh of relief”.In Europe, Paris rose more than two percent thanks to gains in luxury stocks. “A Birkin bag, a bottle of Moet and Gucci shoes are hardly critical imports, which is why the luxury sector is having a strong reaction to this news,” said Brooks.Respite from tariffs was not alone in driving sentiment.Briefing.com analyst Patrick O’Hare said there was “tax policy enthusiasm” as Trump pushes for the passage of legislation that would extend tax cuts from his first term in office.With the US dollar broadly weaker on hopes of a more limited US tariff policy, it also dropped 0.5 percent versus its Canadian counterpart as Canada’s Prime Minister Justin Trudeau announced he will step down.Trudeau’s popularity has waned in recent months, with his government narrowly surviving a series of no-confidence votes and critics calling for his resignation.He faced further pressure from Trump, who has threatened a 25-percent tariff on Canadian goods after he takes office on January 20.- South Korea crisis -In Asia, the Seoul stock market piled on 1.9 percent Monday even as South Korea remains gripped by political uncertainty following last month’s brief martial law attempt by President Yoon Suk Yeol.Anti-graft investigators have asked police to arrest the impeached and suspended leader.Tokyo retreated, with Nippon Steel taking a hit after departing US President Joe Biden blocked its proposed $14.9 billion purchase of US Steel, citing “national security” risks.The companies later announced that they had filed lawsuits in the United States challenging Biden’s decision.- Key figures around 1630 GMT -New York – Dow: UP 0.8 percent at 43,061.05 pointsNew York – S&P 500: UP 1.3 percent at 6,018.60New York – Nasdaq Composite: UP 1.9 percent at 19,993.89London – FTSE 100: UP 0.3 percent at 8,249.66 (close) Paris – CAC 40: UP 2.2 percent at 7,445.69 (close)Frankfurt – DAX: UP 1.6 percent at 20,216.19 (close)Tokyo – Nikkei 225: DOWN 1.5 percent at 39,307.05 (close)Hong Kong – Hang Seng Index: DOWN 0.4 percent at 19,688.29 (close)Shanghai – Composite: DOWN 0.1 percent at 3,206.92 (close)Euro/dollar: UP at $1.0401 from $1.0307 on FridayPound/dollar: UP at $1.2531 from $1.2423Dollar/yen: UP at 157.36 yen from 157.33 yenEuro/pound: UP at 83.04 pence from 82.95 penceWest Texas Intermediate: UP 0.3 percent at $74.19 per barrelBrent North Sea Crude: UP 0.3 percent at $76.74 per barrelburs-rl/cw
Mon, 06 Jan 2025 16:50:08 GMT
