European Shares Pause as U.S. Tax Reform Stumbles

By Mike Bird and Lucy Craymer Features Dow Jones Newswires

European stocks opened roughly flat Friday, with investors around the world still focused on U.S. tax reform efforts.

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Shortly after markets opened the Stoxx Europe 600 index was up by less than 0.1%, lifted by a 0.2% rise in the U.K's FTSE 100.

Overnight a new stumbling block to the proposed tax policy changes emerged, as some Republican senators' concerns about the budget deficit delayed a vote. The promise of changes to U.S. taxes has been one of the driving forces behind the year's market rally.

Bank stocks were down 0.3% in early trading, while a modest increase in energy prices lifted the European oil & gas sector by 0.5%.

As the Dow industrials capped its eighth-straight month higher Thursday, the longest winning streak in 22 years.

"Equities in the U.S. are like a runaway freight train," said Tim Kelleher, head of institutional foreign-exchange sales at ASB Bank in New Zealand.

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But he added that some of Thursday's 1.39% gain could be attributed to end-of-month positioning.

Stocks largely returned to positive territory in late-session trading in the Asia-Pacific region Friday as well.

In Japan, the Nikkei Stock Average closed up 0.4%. China's Shenzhen A-Share index rose by 0.8%.

Hong Kong's Hang Seng Index remained under pressure, down 0.3% mostly due to weakness in Tencent. The Chinese internet giant fell another 2.4%, putting it into correction territory with a 12% decline from last week's latest record high.

It has been a tough week for tech stocks globally, particularly for Samsung Electronics, which lost 8.3%, its worst week in 5 1/2 years.

Oil prices rose in Asia as investors continued to react to the Organization of the Petroleum Exporting Countries and Russia agreeing to extend production curbs. The decision had been expected by the market. U.S. and Brent futures rose by 0.5% and 0.7% respectively.

Write to Mike Bird at Mike.Bird@wsj.com and Lucy Craymer at Lucy.Craymer@wsj.com

(END) Dow Jones Newswires

December 01, 2017 03:44 ET (08:44 GMT)