Volkswacht Bodensee - Stock markets diverge tracking Trump plans

Wall Street jumped Tuesday in its first reaction following Trump's inauguration.

Hong Kong and Shanghai indices retreated Wednesday after the president warned China could be included in a list of countries to be hit with tariffs on February 1.

The dollar "struggled to find a clear direction and traded in a narrow range as market participants sought clarity on Trump's trade policies", noted Joseph Dahrieh, analyst at traders Tickmill.

In Europe, the London and Frankfurt stock markets continued to hit record highs, helped by currency movements.

London's FTSE 100 index was winning support from "a weak pound that allows investors to buy UK companies with international businesses at cheaper prices", noted Swissquote Bank senior analyst Ipek Ozkardeskaya.

Plans by the European Central Bank to keep cutting interest rates in the eurozone has weighed on the euro -- although both the single currency and pound won back some support Wednesday.

Oil prices recovered slightly having tumbled Tuesday in reaction to Trump's announcement of a "national energy emergency" to ramp up drilling in the United States.

Investors are poring over also the latest earnings season.

Netflix added almost 19 million subscribers during the holiday season to finish out last year with more than 300 million subscribers, the US streaming giant announced after the Wall Street close Tuesday.

Traders have been bracing for Trump 2.0 since his re-election in November, with an initial rally -- fuelled by hopes for market-boosting measures -- giving way to worries he would resume his trade war with Beijing and also target others.

There had been optimism that Beijing would avoid being targeted in an early flurry of duties by the White House after Trump said Monday he would hit Canada and Mexico.

But he broadened his targets Tuesday to include China and the European Union.

There is also a concern that Trump's plans to slash taxes, immigration and regulations will reignite inflation and crimp the Federal Reserve's ability to cut interest rates.

Shares in software investment giant SoftBank soared more than 10 percent Wednesday -- leading Tokyo-listed chipmakers higher -- after Trump said it was included in a new $500-billion venture to build infrastructure for artificial intelligence in the United States.

Tokyo's Nikkei 225 piled on more than one percent thanks to SoftBank's advance fuelled by news that it will be part of the Stargate venture along with cloud giant Oracle and ChatGPT-maker OpenAI.

Japanese chipmakers also rose, with Advantest up four percent, while Tokyo Electron and Lasertec gained more than one percent.

- Key figures around 1050 GMT -

London - FTSE 100: UP 0.3 percent at 8,575.89 points

Paris - CAC 40: UP 0.7 percent at 7,825.47

Frankfurt - DAX: UP 1.1 percent at 21,276.64

Tokyo - Nikkei 225: UP 1.6 percent at 39,646.25 (close)

Hong Kong - Hang Seng Index: DOWN 1.6 percent at 19,778.77 (close)

Shanghai - Composite: DOWN 0.9 percent at 3,213.62 (close)

New York - Dow: UP 1.2 percent at 44,025.81 (close)

Euro/dollar: UP at $1.0450 from $1.0426 on Tuesday

Pound/dollar: UP at $1.2367 from $1.2342

Dollar/yen: UP at 155.78 yen from 155.50 yen

Euro/pound: UP at 84.53 pence from 84.45 pence

Brent North Sea Crude: UP 0.6 percent at $79.78 per barrel

West Texas Intermediate: UP 0.8 percent at $76.39 per barrel

T.Suter--VB