Morning Message

Monday Update

Monday 27th March 2017

European shares fell in early trading, hit by losses among miners and banks after US president Trump’s failure to pass his healthcare bill raised worries over his ability to deliver on fiscal stimulus plans. The ESTX 50 (-0.54%), UK markets (-0.82%), Dax (-0.69%) and the CAC 40 (-0.56%) all posted losses in early trading. The basic resources sector was the biggest loser, down over -2%, as copper prices fell following Trump’s healthcare setback, while the banking index was down -1.3%. Bucking the trend was precious metals miners such as Randgold and Fresnillo, both up more than +2%, as risk appetite fell boosting gold which is seen as a safe haven asset.

US stocks ended Friday’s session slightly lower as they pared losses in late afternoon trading after Republicans pulled their bill to overhaul the US healthcare system. The Dow Jones Industrial Average (-0.29%) and the S&P 500 (-0.08%) finished for the weekend slightly lower, while the Nasdaq Composite (+0.19%) was positive. The S&P 500 shot up briefly into positive territory before falling back into the red as Republicans pulled the legislation due to shortage of votes just before the markets closed, leaving investors to assess how the healthcare bill’s failure would affect President Trump’s broader economic agenda. Tenet Healthcare jumped +7.4% as the potential dismantling of Obamacare has pressured hospital stocks over concerns the benefits the companies gained from coverage expansion would diminish. Micron Technology gained +7.4% after revenue and profit forecasts beat expectations.

Asian stocks were mostly lower amid rising doubts over President Trump’s ability to pass legislative reforms after Republican leaders pulled a bill to overhaul the US health Care system. The Nikkei 225 (-1.44%), Hang Seng (-0.68%) and the S&P/ASX 200 (-0.12%) all retreated. Toshiba tumbled -2% after local media reports that Toshiba’s US subsidiary Westinghouse may file bankruptcy on Tuesday and seek support from Korea Electric Power. BHP Billiton dropped -2.74% after the Escondida copper mine strike in Chile left the miner with a loss of about $1 billion and in a weaker position to negotiate.

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