Wall St rally reaches higher, Europe pauses | Fin24
 
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Wall St rally reaches higher, Europe pauses

Dec 18 2019 20:23

Wall Street stocks pushed further higher on Wednesday, but European stocks were mixed as investors appeared to take their foot off the pedal after the recent trade deal-fuelled rally.

Meanwhile sterling extended losses after Prime Minister Boris Johnson fanned fresh fears of a no-deal Brexit.

Wall Street's main indices moved higher from record closes, with the Dow adding 0.1 percent in late morning trading, as investors seemed unfazed that US House of Representatives was about to impeach President Donald Trump.

"US traders continue to keep one eye on impeachment proceedings, but even when the president does eventually suffer the ignominy of being indicted we can remain confident that the overall result will still end in failure for the Democrats, given the control of the Senate wielded by Republicans," said Chris Beauchamp, chief market analyst at IG.

The mood across trading floors remains upbeat following last week's China-US agreement that will see US tariffs lowered. Observers said that while details of the pact remain thin, the year looks set to end on a positive note.

Asian stock markets had mostly advanced after Wall Street indices clocked up more record highs Tuesday following healthy US housing and industrial output data.

European stocks did as well initially, but Frankfurt and Paris later turned lower.

Rising concerns about the possibility of a no-deal Brexit hit the pound, but softer sterling helped London's blue-chip FTSE 100 index, which has a number of multinationals that report in dollars.

The pound also took a knock from official data that showed UK annual inflation remained at a three-year low of 1.5 percent, far below the Bank of England's 2.0-percent target level.

"The pound has continued to slip back after the strong gains of recent weeks, after the UK government said that they wouldn't look to seek an extension to the transition period," said Michael Hewson, chief market analyst at CMC Markets UK.

"While some have suggested that this raises the risk that the UK could leave the EU without a deal, such an event still remains well over a year away, and we haven't even left the EU yet," he added.

The euro traded mixed as a closely-watched survey showed confidence among German business leaders rose in December, in line with other recent positive economic indicators, as the geopolitical risks to Europe's biggest economy appear to ease.

The Ifo institute's monthly business climate index climbed 1.2 points to 96.3 this month, its strongest reading since June and higher than forecasts from analysts surveyed by Factset.

On the corporate front, French carmaker PSA and US-Italian rival Fiat Chrysler said they had agreed terms on a merger to create the world's fourth largest automaker as the sector grapples with the difficult and costly transition to cleaner and more sustainable mobility.

Shares in PSA climbed 1.5 percent to 22.45 euros in Paris trading, while shares in Fiat Chrysler ended nearly unchanged in Milan at 13.60 euros.

In London, Pearson climbed 1.7 percent to 655 pence after the publisher announced the departure of its chief executive alongside news that it had sold its remaining 25 percent stake in Penguin to German media group Bertelsmann.

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