Stock markets mostly ticked higher yesterday, although investors appeared to take their foot off the pedal after the recent trade deal-fuelled rally, while sterling extended losses after Prime Minister Boris Johnson fanned fresh fears of a no-deal Brexit.
European and Asian stock markets had mostly advanced after Wall Street indices clocked up more record highs Tuesday following healthy US housing and industrial output data.
Wall Street’s main indices pushed even higher at the start of trading yesterday, with the Dow adding 0.1 per cent.
It comes as President Donald Trump faced becoming only the third US leader to be impeached as the House of Representatives sits for a historic vote yesterday that would trigger his trial in the Senate.
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.
The US data was encouraging as it was “very unclear that the improvement in trade sentiment – hence a better global outlook – is going to translate into real positive economic momentum immediately”, said Stephen Innes at AxiTrader.
“But it’s probably safe to say things shouldn’t get worse after the tariff rollback. And with the global data apparently bottoming, investors are playing from a much stronger hand than initially imagined,” he added.
In foreign exchange, the pound extended losses versus the dollar and euro – unable to mount a recovery also as official data showed UK annual inflation remained at a three-year low of 1.5 per cent, far below the Bank of England’s 2.0-per cent target level.
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 1.2 per cent to 22.37 euros in Paris trading, while shares in Fiat Chrysler added 0.2 per cent to 13.62 euros in Milan.
In London, Pearson jumped 2.4 per cent to 659 pence after the publisher announced the departure of its chief executive alongside news that it had sold its remaining 25 per cent stake in Penguin to German media group Bertelsmann.