By Connor Campbell, Financial Analyst, Spreadex
The Dow Jones came back strong this afternoon, giving a helping hand to the European indices in the process.
So far this week the major threats to market stability – namely the further heightening of tensions between the US and North Korea, and the potential departure of Trump’s economic advisor Gary Cohn – are yet to materialise, freeing up the Dow Jones and dollar to maintain their rebound. Even the news that the President wants to send more troops to Afghanistan couldn’t disrupt the comeback – the Dow surged 120 points to re-cross 21800, while the dollar jumped half a percent against the pound and the euro.
With sterling on the ropes against the greenback, and the US open injecting a bit more positivity into an already perky session, the FTSE could expand its gains to 1%, taking it within 15 points of 7400. Solid growth in the commodity sector – especially from BHP Billiton (LON:BLT), which announced it was selling its underperforming US shale business – and a 3.7% surge from Tesco (LON:TSCO), after Kantar Worldpanel’s latest figures revealed the supermarket’s sales rose 3% for the 12 weeks to mid-August, also put a spring in the FSTE’s step.
The situation in the eurozone was pretty similar. The DAX and CAC rose 1.4% and 1% respectively, both overjoyed at the weakened euro (which itself took a hit after the German and eurozone-wide ZEW economic sentiment readings both missed forecasts this morning).
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