Markets

European Shares Gain for Third Day Following Overnight Gains on Wall Street

European stocks were advancing for a third consecutive day on Thursday after optimism about the expected economic policy measures of new US President Donald Trump lifted the Dow Jones Industrial Average to an all-time high on Wednesday, carrying it over the 20,000 point mark.

Trump has promised infrastructure spending, tax cuts and looser regulation to boost the US economy, the world's largest, and has been working through a list to tick off election pledges since being inaugurated on Friday.

"The signing of executive orders" by Trump "for the Keystone XL pipeline and for the Mexican border wall have served to re-spark the reflation trade pushing money out of bonds and into stock markets, with construction companies getting the biggest lift," Michael Hewson, chief market analyst at CMC Markets in London, said by e-mail. "More importantly investors are surmising not unrealistically that all this fiscal stimulus at a time when the US labour market is already fairly tight, is going to exert upward pressure on wages, and ergo inflation."

In economic news, Britain's Office for National Statistics ( ONS ) said that the UK's economy grew by 0.6% in the final three months of 2016, the same rate as in the third and second quarters. That was faster than the 0.5% expected by economists in an investing.com poll. UK gross domestic product increased by 2% in 2016, slowing from 2.2% in 2015 and from 3.1% in 2014, the ONS said.

In equities, shares in Unilever fell 4.8% after the consumer-goods maker reported lower-than-expected fourth-quarter sales growth and Diageo soared 4.5% after saying that reported net sales and operating profit were up 14.5% and 28%, respectively, in the six months to December 31.

Royal Bank of Scotland rose 4.4% after it revealed that it had set aside a further $3.8 billion to cover fines in the US relating to residential mortgage-backed securities. Drugmaker Bayer rose 2.7% and Germany's second largest lender, Commerzbank, gained 2.5% in Frankfurt. Deutsche Bank, the nation's largest lender also rose, advancing 2%.

Amid rallying financial services shares across Europe, France's Societe Generale gained 2.2% and insurer AXA advanced 1.8% in Paris. Pernod Ricard, a French maker of distilled beverages, gained 1.8%.

The Europe-wide STOXX 600 index rose 0.5%, the euro-region blue-chip STOXX 50 index was flat. The FTSE 100 in London gained 0.2%, Frankfurt's DAX gained 0.5% and the CAC 40 in Paris rose 0.3% at the time of writing.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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