Stocks Steady With Markets Hopeful On US Tax Plan

European and Asian stock markets steadied Wednesday after a global equities rally driven by optimism over a US tax reform plan

LONDON, , (UrduPoint / Pakistan Point News - 23rd Aug, 2017 ) - European and Asian stock markets steadied Wednesday after a global equities rally driven by optimism over a US tax reform plan, but President Donald Trump's comments about terminating a key trade agreement capped gains.

The euro gained against the Dollar following well-received eurozone data, analysts said. "Manufacturing and services PMIs from the eurozone, Germany and France were all very strong and well above the level that separates growth from contraction, suggesting that the recovery is continuing to gain traction," said Craig Erlam, senior market analyst at Oanda trading group.

In London, British advertising giant WPP saw its share price slump almost 12 percent to 1,405 pence after the company cut its full-year revenue forecast. "WPP is very much seen as the bellwether of the advertising industry and as such is widely regarded as a global economic barometer and so it is unsurprising the shares have reacted," Graham Spooner, investment research analyst at The Share Centre, said in a client note.

Provident Financial won 1.1 percent to 596 pence, a day after the ailing UK lender's share price had crashed 66 percent. Overall, stock markets had chalked up a comeback Tuesday after struggling in recent weeks owing to a standoff between the US and North Korea, which had been compounded by last week's terror attack in Barcelona.

The US president's woes have fuelled speculation he will struggle to push through his market-friendly economy-boosting policies that fanned a global market rally in the months after his November election.

Despite ongoing chaos at the White House, markets have been heartened by reports suggesting that the Trump administration was making headway on a tax reform plan. "Some of the US political uncertainty may have been removed by a report on the Trump administration making progress on tax reform, but a wait-and-see mood is strong ahead of Jackson Hole and tensions in North Korea still in place," said Tsutomu Nakamura, strategist at Ueda Harlow Corp., referring to a central bankers meeting on Friday.

The Yen rose as investors pushed into safer investments after Trump said in a US speech that he may end the North American Free Trade Agreement, and vowed to pressure Congress to fund a border wall with Mexico that was at the centre of his election campaign.

The stronger yen pared some gains in Tokyo where the benchmark Nikkei 225 index ended 0.3-percent higher Wednesday, while Seoul and Taipei edged up 0.1 percent and Singapore was flat. But Shanghai ended 0.1-percent lower and Sydney slipped 0.2 percent.

Hong Kong's stock market was closed as powerful Typhoon Hato brought the southern Chinese city to a standstill. All eyes are on the Jackson Hole symposium in Wyoming at the end of the week, which brings together the world's top central bank chiefs.

Much of the attention will be on Federal Reserve boss Janet Yellen, with hopes for some clues about the bank's plans to wind in its huge bond holdings. European Central Bank chief Mario Draghi's speech will also be closely watched as Frankfurt-based policymakers consider cutting back their bond purchases.