Stock markets in Europe inched slightly higher Thursday morning after U.S. President Donald Trump unveiled much-awaited tax plans.
The pan-European Stoxx 600 was flat, just 0.04 percent higher, with most sectors trading in positive territory. Banking stocks were, for the second day in a row, the best performers at the open, boosted by plans to overhaul the American tax system and hopes of higher interest rates.
Trump announced the biggest tax reform for the U.S. in thirty years on Wednesday, proposing tax cuts for most citizens. However, the plan received some criticism for favoring the wealthier and raised doubts over its impact on the country’s deficit. U.S. bond yields jumped on the news and the dollar was trading 0.12 percent higher against a basket of foreign currencies at about 8:00 a.m. London time.
Autos also moved higher on Thursday morning after China’s Industry minister said that carmakers will have to hit a threshold of 10 percent of annual sales of new energy vehicles starting in 2019.
However, the trading day wasn’t going so well for the Swedish retailer H&M. The stock dropped nearly 5 percent to the bottom of the European benchmark after a 20 percent fall in quarterly pretax profits from a year ago.
Ryanair also dropped more than 1 percent in early trade after announcing further flight cancellations.
In other corporate news, Spotify is reportedly being valued at $16 billion by private traders, which could increase its chances of a flotation in 2018, Reuters reported. Rovio and Pirelli are expected to announce their final IPO pricing Thursday.
Meanwhile, South Korean authorities said Thursday that they foresee further provocative actions from neighboring North Korea in mid-October. Asian stocks were mixed on Thursday as a result.
Back in Europe, investors will monitor comments from Brexit negotiators Thursday afternoon as the fourth round of talks comes to an end. In Germany, Chancellor Angela Merkel seems closer to forming a government after Wolfgang Schaeuble decided to become president of the parliament and thus allowing another party to take the Finance Ministry.
Governor Mark Carney of the Bank of England is due to speak at 9.15 a.m. London time at the bank’s 20-year anniversary of independence.
On the data front, there will be business climate and consumer confidence figures for the euro zone out at 10:00 a.m. London time.