Stock markets mostly down, US tax cuts head for Trump’s desk

Stock markets mostly fell Wednesday as investors took a breather following recent gains, while US senators voted for a controversial tax overhaul which traders expect to boost corporate profits.

Equities have been on a broad upswing since last week when holdout Republican senators said they would back Donald Trump’s signature tax legislation. The president has promised that the changes will fire up an already healthy US economy.

After months of uncertainty, the Senate narrowly passed the deal, which slashes taxes across the board.

The House of Representatives passed the bill on Tuesday, but will have to vote again Wednesday owing to a rules mix-up. 

Despite the expected passage of the bill, all three main Wall Street indices ended Tuesday in the red — having clocked up a series of record closes of late.

The weak lead kept both Asia and Europe tethered.

“Success in the tax reform plan now looks assured, after the US Senate passed the measure late last night,” noted IG analyst Chris Beauchamp in London on Wednesday.

“We should hardly be surprised that markets are not exactly going crazy with excitement, since all the fun had been priced in.”

Expectations that the massive reduction in corporate taxes would boost company profits had previously helped fuel a surge in global equities. 

In European deals on Wednesday, Frankfurt and London stocks slipped 0.1-percent lower and Paris shed 0.2 percent.

British supermarket Tesco, however, rose 0.3 percent to 206.60 pence as regulators gave the final green light to its £3.7-billion ($4.8-billion, 4.2-billion-euro) takeover of wholesaler Booker.

In Asia, Tokyo and Sydney stock markets each ended up 0.1 percent, while Hong Kong lost 0.1 percent and Shanghai closed down 0.3 percent.

 – Bitcoin dives – Elsewhere, bitcoin plunged around 15 percent Wednesday on news that an exchange in South Korea — where many cryptocurrency traders live — had gone bust.

The unit, which hit a record peak of $19,500 at the start of the week, took a hit as it emerged that Youbit had been hacked, leading the firm to say it would close and enter bankruptcy.

Also on Tuesday, US authorities suspended trading in a popular bitcoin-related stock, citing concerns about market manipulation. The Crypto Company’s share price had risen 1,700 percent between the end of September and Monday evening before the Securities and Exchange Commission intervened to halt trades until January 4.

Bitcoin has soared almost 30-fold since the start of the year and this month saw it move into the mainstream as two major US exchanges began trading futures in the unit.

– Key figures around 1115 GMT – London – FTSE 100: DOWN 0.1 percent at 7,534.53 points

Frankfurt – DAX 30: DOWN 0.1 percent at 13,204.50

Paris – CAC 40: DOWN 0.2 percent at 5,372.74

EURO STOXX 50: DOWN 0.2 percent at 3,573.50

Tokyo – Nikkei 225: DOWN 0.1 percent at 22,891.72 (close)

Hong Kong – Hang Seng: DOWN 0.1 percent at 29,234.09 (close)

Shanghai – Composite: DOWN 0.3 percent at 3,287.61 (close)

New York – DOW: DOWN 0.2 percent at 24,754.75 (close)

Euro/dollar: DOWN at $1.1838 from $1.1840 at 2200 GMT

Pound/dollar: UP at $1.3393 from $1.3386

Dollar/yen: UP at 113.15 yen from 112.88 yen

Oil – Brent North Sea: UNCHANGED at $63.80 per barrel

Oil – West Texas Intermediate: UP 19 cents at $57.75  DM


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