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Business

US stocks sharply higher on Trump speech

Stocks on Wall Street have jumped as markets appear to like Donald Trump's softer tone. The US President's first speech to Congress failed to provide any details on his economic policy, but investors looked unfazed.

Shares of Wall Street-listed companies surged back to records on Wednesday minutes after trading opened.

The Dow topped 21,000 for the first time as investors felt there was a somewhat softer tone in Donald Trump's congressional address Tuesday night.

Two minutes into trading, the Dow Jones Industrial Average was up 0.9 percent. The broad-based S&P 500 gained 0.8 percent, while the tech-rich Nasdaq Composite Index also advanced 0.8 percent.

Earlier in the day, the greenback had extended gains against the Japanese yen, while the euro dropped 0.2 percent, which analysts said had been prompted less by Donald Trump, but by renewed speculation about a possible March rate hike by the US Federal Reserve.

European shares gained in morning trading, with results driving specific stock moves, while basic resources were the top sector performers after The US president pledged $1 trillion (49 billion euros) of infrastructure spending.

The pan-European STOXX 600 index rose 0.7 percent,with Germany's DAX and France's CAC 40 outperforming peers, gaining 1 percent in early trading. The blue-chip DAX had cleared the 12,000-point threshold once again by the closing bell.

In his long-awaited first speech to the US Congress, Donald Trump reiterated his intention to broadly overhaul the US immigration system and promised massive tax relief for the middle class, but stopped short of giving details.

Disappointment among analysts

Market analysts were keen to see if Trump would outline a specific blueprint on what he has described as a "phenomenal" tax cut and infrastructure spending, promises that have stoked a global equities rally after his November election.

But Jeffrey Halley, senior market analyst at forex firm OANDA, described the speech as a "highly scripted damp squib."

"President Trump's address was high on rhetoric and light on detail, leaving the market underwhelmed," he noted in a commentary.

Daisuke Uno, chief strategist at Sumitomo Mitsui Bank also said that Trump had just repeated what he had said, adding that the US dollar would have been sold on disappointment, but that a "barrage of comments from the Fed" had overwhelmed that.

Kumiko Ishikawa, FX market analyst at Sony Financial Holdings, shared his view. "Before Trump's speech, investors were reluctant to fully price in the increased possibilities of a March rate hike. But now that it's over without turbulence, the dollar is extending its rally," he said in a note to investors.

Asian market relief

Investors in Tokyo breathed a sigh of relief that the US President did not deliver any unwelcome surprises regarding future US trade policy, which Donald Trump believes should be more protectionist.

As he held off from criticism of Japan and other nations he has previously accused of taking advantage of the US through unfair trade practices, Tokyo's benchmark Nikkei 225 ended the day 1.44 percent higher at 19,393.54. Japan's broader Topix index of all first-section issues gained 1.16 percent.

The rise in the US dollar against the yen also boosted Japanese shares because it'll make the country's exports more competitive on the American market.

The Mexican peso, seen as the most vulnerable to Trump's protectionist policies and harsh rhetoric, also took his speech in stride. The peso was little changed at 20.097 per dollar.

uhe/kd (Reuters, AFP, dpa)