Trump stimulus hopes send markets to record highs

Wall Street’s three main stock indices hit record highs for a second straight day on Tuesday before trimming gains, while European shares also rose on expectations that markets would benefit from US president-elect Donald Trump’s policies.

A sharp rally in metals prices and mining stocks boosted European shares as the recent trend of a rotation to cyclical plays continued.

Britain’s top share index rose, buoyed by the record highs on Wall Street and also by the rally in mining shares. The FTSE 100 ended up 0.6 per cent.

The Iseq in Dublin rose 0.25 per cent.

DUBLIN

FBD

was up more than 5 per cent as the insurer continued to benefit from Government plans to reform the sector and help reduce costs of claims and bring down premiums.

Kingspan was up close to 3 per cent. It is one of the Irish companies that would be expected to benefit from a stimulus programme in the US.

Dalata, Ireland's largest hotel operator, finished the day up close to 2 per cent after announcing it had finalised and signed a deal to take over the operation of the old Burlington hotel in Dublin.

Property-related stocks also performed well, including Green REIT, up 3.75 per cent, and Hibernian REIT, up 2.22 per cent.

LONDON

Mining stocks rose 4 per cent, among the top gainers, with

Anglo American, BHP Billiton, Antofagasta

and

Glencore

up 3 to 7.6 per cent. The sector is up nearly 5 per cent since the election of Mr Trump spurred bets that his planned fiscal stimulus would spur inflation in the economy.

Compass Group fell 4.7 per cent after its results. Trading in the US remained strong, but analysts said that it had fared less well in Europe and Britain, and its margins were unimpressive.

Babcock and Kingfisher also dropped after results, down 4.6 per cent and 3.1 per cent respectively. Babcock's update was encouraging, analysts said, and the stock did initially open higher. However, a comment on slower internal growth and concerns for the outsourcing services sector hit the stock.

Among mid-caps, Entertainment One dropped 12 per cent after it reported a fall in first-half profit. TalkTalk dropped 4.1 per cent to its lowest since June 2012. It is down 20 per cent since it reported results this time last week.

EUROPE

Roche Holding

and

Novartis

tracked losses in US healthcare shares. Utilities bucked the trend as

Enel

rose after announcing a plan to cut costs and dispose assets.

Swatch Group lost 3.6 per cent and Cie Financiere Richemont fell 3 per cent as data showed the biggest monthly plunge for Swiss watch exports in seven years.

Banco de Sabadell dropped 4.4 per cent after Colombian investor Jaime Gilinski, one of its largest shareholders, reduced his stake in Spain's fifth largest lender.

Essilor International plunged 6 per cent after cutting its 2016 revenue estimates citing a slowdown in the US.

NEW YORK

Seven of the 11 major S&P 500 sectors were trading higher on Tuesday afternoon, with the consumer discretionary index boosting the broader index the most. The healthcare sector was off 1.95 per cent, leading the decliners and set for its biggest one-day drop in nearly a month.

The S&P 500 was down 0.11 percent, at 2,195.83, reversing course after hitting a high of 2,203.56. The Nasdaq Composite was up 0.13 per cent, at 5,376.10, after touching a high of 5,392.26.

Among the consumer discretionary index's top drivers was Dollar Tree, which surged 9.7 per cent to $89.98 after the dollar-store chain reported a better-then-expected quarterly profit.

Medtronic tumbled 10.2 per cent to $72.33 after the medical device maker reported quarterly revenue that missed expectations and cut its full-year adjusted earnings forecast.

Advancing issues outnumbered decliners on the NYSE by 1,775 to 1,112. On the Nasdaq, 1,431 issues rose and 1,305 fell. – Additional reporting: Bloomberg/Reuters