Stock markets falter as Trump holds back on detail

AFP: World stock markets retreated Thursday and the dollar sank, with investors deflated by a lack of economic detail from Donald Trump at his first post-election press conference.

Traders had hoped the real estate tycoon would flesh out some of his campaign promises such as tax cuts and infrastructure spending, but he gave very little away Wednesday, fuelling uncertainty about his aspiration to boost the US economy.

However, he did lash out at drugs companies for “getting away with murder” in offshoring production and overcharging, which weighed on the pharmaceuticals sector.

“The FTSE is suffering in the aftermath of yesterday’s Trump speech, with pharmaceutical firms Hikma and Shire proving a drag after the president-elect promised lower US drug prices,” said Joshua Mahony, market analyst at IG trading group.

“Fortunately, the weaker dollar has helped commodity prices push higher once more, putting Anglo American, Rio Tinto and BHP Billiton at the top of the leader board.”

Trump also announced a plan to hand control of his business to his adult sons to avoid conflicts of interest, and angrily dismissed questions about his relationship with Russia and unsubstantiated claims Moscow has compromising information on him.

“Dealers were extremely discouraged by the lack of detail regarding the new administration’s economic plan, as the presser was more about extinguishing smouldering hot spots regarding conflict of interest and the Trump organisation’s associations with Russia,” said Stephen Innes, senior trader at Oanda trading group.

The disappointment saw traders shift out of the dollar towards the haven yen currency, which in turn dragged on Tokyo’s Nikkei, which closed down 1.2%.

Around the half way stage, London’s benchmark FTSE 100 index was down 0.1%, following a run of record highs thanks to a weak pound on Brexit concerns.

In the eurozone Thursday, Frankfurt’s DAX 30 index dropped 0.4% and the Paris CAC 40 shed 0.1% compared with Wednesday’s closing levels.

Traders brushed off news that the German economy grew by around 0.5% in the final quarter of 2016 - data that suggested Europe’s top economy regained momentum after a summer dip.