Eurozone shares tumble as tax bill drives euro up against dollar

EU shares dropped yesterday, ext-ending their decline from the previous session as currency dynamics took hold of the stock market.

The dollar’s dip as investors considered a US tax overhaul a done deal translated into a euro boost and hurt eurozone benchmarks.

Eurozone stocks fell 0.7 per cent and the top index of eurozone companies dropped 0.8 per cent.

Germany's exporter-heavy DAX index fell 1.2 per cent. Britain's FTSE 100, insulated from the euro's gains, edged 0.3 per cent lower.

The Republican-led US House of Representatives was set to give final approval to the sweeping $1.5 trillion tax bill later yesterday, completing the largest overhaul of the US tax code in more than 30 years.

But the US dollar buckled and US stocks edged lower, with investors assuming the effects of the bill were already priced in.

The euro's sharp gain against the dollar hurt European stocks with large US earnings.

Glanbia, which derives a quarter of its revenues from the US, sank 4.6 per cent.

“In the short-term the US tax reform is already priced in. What remains to be seen is whether US companies will follow up with share buy-backs or investments,” said Andrea Scauri, fund manager at Italy's...