Financial markets analysis: Investors very reassured 24/01/2020
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The main European stock markets rose on Friday morning and wiped out their losses of the previous day, the decision of the World Health Organization not to declare an international emergency linked to the coronavirus epidemic in China having momentarily allayed fears of a global pandemic, while initial results from PMI surveys suggest improved activity in Germany.
In Paris, the CAC 40, which finished below 6,000 points on Thursday for the first time since December 31, gained 1.4% to 6,055.58 around 8:50 GMT. In London, the FTSE 100 takes 1.28% and in Frankfurt, the Dax advances by 1.4%.
The EuroStoxx 50 index was up 1.44%, the FTSEurofirst 300 by 1.06% and the Stoxx 600 by 1.22%.
Coronavirus identified in Wuhan, central China, killed 25 and infected 830 people nationwide according to the latest count released by Beijing, but no deaths have occurred in other countries (seven so far ) where cases have been reported.
The World Health Organization (WHO) has given up on declaring an international public health emergency. The Chinese authorities continue to announce traffic restriction measures to try to limit the risks of spreading the epidemic.
In Europe, provisional results from IHS Markit surveys of purchasing managers suggest an improvement in activity in Germany and a measured impact of strikes on the sentiment of purchasing managers in France.
Carrefour (PA: CARR) gained 5.23%, the largest increase in the CAC 40, the day after the announcement of an acceleration in sales growth in the fourth quarter and a forecast growth in current operating income annual.
In Frankfurt, Bayer (DE: BAYGN) wins 3.79% and shoots the Dax after a press article evoking a possible amicable settlement to ten billion euros of complaints against Roundup.
On the downside, Rémy Cointreau (PA: RCOP) yields 8.84%, the market sanctioning a 4.1% drop in turnover over nine months and the suspension of its objectives for the current and medium-term financial year term.
Ericsson (ST: ERICb) lost almost 6%. The Swedish telecommunications network equipment group announced a sharp increase in adjusted operating profit in the fourth quarter of 2019, while explaining that the period had been affected by the slowdown in its activities in the United States.
Ipsen (PA: IPN) drops 20.63% after stopping clinical trials of an experimental treatment for a rare bone disease.
On the Tokyo Stock Exchange, the Nikkei index ended up 0.13% in a hesitant session between concerns over the Chinese virus and the relief provided by Intel (NASDAQ: INTC).
The Japanese indicators of the day also showed a softening of the contraction of activity in the manufacturing sector in January and an acceleration of inflation in December, still far from the objective of the Bank of Japan.
Over the whole week, the Nikkei posted a decline of 0.89% after two weeks of increases.
The markets of Mainland China, Hong Kong, Taiwan and South Korea are closed due to the Lunar New Year.
The New York Stock Exchange ended in dispersed order and without much variation Thursday, after a session during which it will have found it difficult to follow a lasting trend according to the information on the spread of a coronavirus in China and following mixed corporate results.
The Dow Jones index lost 26.18 points (-0.09%) to 29,160.09, the Standard & Poor’s 500 gained 3.79 points, or 0.11%, to 3,325.54 and the Nasdaq Composite a gained 18.71 points (0.20%) to 9,402.48 points, barely breaking its closing record.
Intel gained 7% in off-session trading after the close, with investors hailing 2020 forecasts above expectations which support the scenario of a recovery in the semiconductor market.
As a result of the renewed appetite for risky assets, the ten-year German Bund’s yield rose by more than one basis point to -0.29% after three consecutive sessions of decline which brought it down Thursday to -0 , 3%, the lowest since mid-December.
The euro remains close to the seven-week low hit Thursday during the press conference by Christine Lagarde, the president of the European Central Bank (ECB), marked by a tone more cautious than anticipated by the majority of observers. The single currency is traded around 1.1050 dollars against 1.1036 at Thursday’s low.