Euro rises above $1.18
European stocks struggled for direction on Tuesday as traders weighed up rising optimism that U.S. tax reforms will get passed this week against a disappointing reading on German business sentiment.
Continue Reading Below
What are markets doing: The Stoxx Europe 600 index was up 0.1% at 392.87, slightly building on Monday's rally (http://www.marketwatch.com/story/european-stocks-rally-on-us-tax-reform-optimism-with-banks-in-charge-2017-12-18) when the European benchmark scored its highest close since Nov. 8. The 1.2% jump also marked its biggest one-day percentage gain since July.
Germany's DAX 30 index fell 0.1% to 13,302.09 on Tuesday, while France's CAC 40 index slipped 0.1% to 5,414.11.
The U.K.'s FTSE 100 index added 0.2% to 7,554.91 (http://www.marketwatch.com/story/ftse-100-sticks-around-6-week-high-with-us-tax-vote-on-deck-2017-12-19).
The euro rose to $1.1804 from $1.1782 late Monday in New York.
What's driving the market: Traders focused on signs the highly anticipated tax reform in the U.S. will get the final signoff this week. Fears that the Republicans would struggle to pass their major tax reform bill eased on Friday after 11th hour concessions made to the final version managed to appease the holdouts. Sens. Bob Corker of Tennessee and Marco Rubio of Florida both pledged their support for the bill, sparking optimism the final vote could come before Christmas.
The House of Representatives is expected to vote on the final version on Tuesday, while the Senate vote is expected to follow either on Tuesday or Wednesday. That should be enough time for the bill to land on President Donald Trump's desk for the final signature before Friday, which is the Republicans' self-imposed deadline.
In Europe on Tuesday, investors assessed the German Ifo business climate index, which is seen as leading indicator for economic activity in Europe's largest economy. The index dropped to 117.2 in December, down from 117.6 in November and missing forecasts of a 117.6 reading.
What strategists are saying: "Despite a disappointing showing this month, the Ifo figure remains close to record highs, and there is a growing feeling that the eurozone has emerged from a long decline, with Germany likely to be the main beneficiary of this new European resurgence," said Joshua Mahony, market analyst at IG, in a note.
Stock movers: Shares of Dialog Semiconductor PLC (DLG.XE) rallied 9.1% after news that Chinese state-owned chip maker Tsinghua Unigroup has increased its stake in the Anglo-German company to 9% from about 8.1%.
Old Mutual PLC shares (OML.LN) jumped 3.9%, trading at the top of the FTSE 100, after the financial services firm said it will sell its single-strategy asset-management unit for GBP600 million ($801.8 million) to private-equity company TA Associates (http://www.marketwatch.com/story/old-mutual-to-sell-unit-for-600-million-2017-12-19).
British American Tobacco PLC (BATS.LN) (BATS.LN) rose 1.3%, with Berenberg raising its price target on the company by 3% to GBP57.20 a share as it expects a reduction in the U.S. corporation tax rate to result in higher earnings for BAT.
(END) Dow Jones Newswires
December 19, 2017 06:07 ET (11:07 GMT)