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Stocks dragged down by Trump comments

Trump attacked the pharmaceutical industry for high drug prices and for manufacturing overseas

Gulf News

London: Stocks came off their highs on Wednesday as comments by US President-elect Donald Trump weighed on prices on early Wall Street, dragging European markets down with them.

London’s benchmark FTSE 100 still managed another record closing high, ending 0.2 per cent higher on the day at 7,290.49 points. But it was noticeably lower than an all-time intraday high of 7,328.51 points.

Similar patterns were seen in other European bourses.

“The session was a bit erratic, with the market lacking an overall trend and mostly looking to position itself as well as possible before and during Donald Trump’s press conference,” said Alexandre Baradez, an analyst with IG France.

In Trump’s first press conference since his election win, the president-elect denied claims that Russian intelligence has gathered compromising personal and professional information on him.

“It’s all fake news. It’s phoney stuff. It didn’t happen,” he said in a press conference.

Trump also attacked the pharmaceutical industry for high drug prices and for manufacturing overseas, saying he will create new procedures for bidding on drugs.

The industry is “getting away with murder,” Trump said.

US pharma stocks dropped in response, led by Pfizer and Johnson and Johnson.

Analysts said initial excitement about Trump’s policy plans could turn to scepticism about whether he can actually deliver.

“Markets have been buoyed in recent months by the prospect of growth friendly stimulus measures promised by Trump during the election campaign including tax cuts and fiscal stimulus,” said Craig Erlam at Oanda.

The FTSE’s recent rally has been fuelled by the weak pound — which has struck multi-year lows and languished since Britain’s EU exit vote on June 23 — as it boosts share prices of multi-nationals as they profit from favourable exchange rates.

Elsewhere, Eurozone stocks have also pushed higher amid hopes of more stimulative US monetary policy.

“The incredible bullish sentiment seems to be borne out of a concoction of a weak pound, loose monetary policy, rising commodity prices and expectations of increased US fiscal stimulus,” said Joshua Mahony, analyst at traders IG.

Asian markets rose, with commodities-linked firms boosted by China’s strong inflation reading.

China on Tuesday said factory-gate prices surged last month at their fastest pace in more than five years, leading to hopes the country could export much-needed inflation around the world and help kick-start global growth.

The news helped ramp up prices in key commodities such as iron ore, copper and aluminium, which in turn provided support to producers.

In London, Anglo American won 1.7 per cent and Antofagasta gained 0.9 per cent in value.

The British capital’s top gainer was supermarket chain Sainsbury’s. Shares jumped 4.0 per cent after it posted rising sales over the key Christmas period.

Oil prices were higher after two days of sharp losses, hit by doubts about the effectiveness of OPEC’s planned output cuts.