World stock markets fell yesterday, pulled down by weaker prices on Wall Street as investors wait for new political developments in the US, traders said.
London’s FTSE 100 fell 0.2% to close at 7,171.15; Frankfurt’s DAX 30 was 1.2% at 11,509.84, while Paris’ CAC 40 fell 1.0% at 4,778.08.
“The unpredictable nature of (US President Donald) Trump...makes it very difficult to anticipate what his next moves will be, as evidenced by his actions a week ago on immigration,” said Oanda analyst Craig Erlam. “This may ensure for now, at least, that while markets have remained volatile, a more cautious approach will be adopted during the bedding-in period,” he said.
“There was a more risk-off tone to markets on Monday,” agreed Jasper Lawler of London Capital Group.
Following the exuberance of the markets last week, stocks on Wall Street fell as a result of tensions between the White House and the judiciary, the expert said.
“The decision to overrule Donald Trump’s travel bans edges the US one step closer to the kind of constitutional crisis that nobody would want to invest in,” Lawler said.
On January 27, Trump’s executive order slapped a blanket ban on entry for nationals of the seven countries for 90 days and barred all refugees for 120 days. Refugees from Syria were blocked indefinitely.
But a US judge blocked the ban on Friday in a ruling that was upheld by a US appeals court on Sunday.
On the economic news front, this week was expected to be quiet in terms of data and central bank decisions.
But quarterly earnings reports from a range of companies could provide some momentum, Oanda analyst Erlam said.
This week’s calendar of earnings includes Coca-Cola, General Motors and Expedia.
The global banking sector meanwhile cheered Trump’s order to review key reforms enacted after the 2008 financial crisis.
The announcement was the first step towards scaling back tougher regulations on the banking industry, following Trump’s promise to cut red tape to fire up the world’s top economy.
“President Donald Trump has proven to be one of the biggest influences on global markets since winning the US election,” said Joshua Mahony, market analyst at IG trading group. “Friday’s comments regarding a wish to reduce financial regulations provides yet another batch of winners, with banks rallying sharply.”


Related Story