The European stock exchanges deepen the correction of this Thursday as the session progresses. The strong rebound in the number of deaths and infected by the new coronavirus (Covid-19) invites caution in the parks. The return to falls in oil does not help either. Asian places have registered slight declines previously. The indices of the Old Continent are separated from their resistance, those that can open the door tomorrow to a potential attraction. The IBEX 35 endangers 9,800 points. However, according to technical analysis, there is no reason to be alarmed. All this in a day in which corporate accounts focus the attention of investors.
One more day, the evolution of the coronavirus pandemic emerged in Wuhan (China), officially named Covid-19, marks the evolution of markets around the world.
Investors and analysts have been calm in the past sessions due to the moderation in the increase in the number of people infected and killed by this disease every day.
However, the Chinese authorities have confirmed that this Wednesday there have been 14,840 new cases of infection and 242 deaths. This marked increase is due to a change in calculation method of the cases.
“We will have to see again if the numbers of daily infections are moderating”
“From this new methodology it will be necessary to see again if the daily contagion figures are moderating,” explains the Department of Income Analysis 4 in its daily report.
The new scenario invites caution if the disease can have a greater impact (or not) on the economy of China, the second largest potential in the world, and global. But it is still “too early” to evaluate it, as the AXA IM manager said yesterday in a report. A notice in line with the one given a day earlier by Unigestión experts, who in a market comment stressed that it is still “impossible” to calculate the negative effect of Covid-19 on the world economy.
In fact, the president of the Federal Reserve (Fed), Jerome Powell, has warned this week in the US parliament of the “disturbances” that can cause the Covid-19 in the economy of the whole world. Therefore, he said, the US central bank is “closely monitoring the emergence of the coronavirus.”
However, panic still does not spread. Eurozone investors believe that the impact so far has been “relatively limited.” Also weighing expectations that Beijing will soon carry out fiscal measures to mitigate the slowdown in its economy, as Link Securities analysts recall in their daily report. Also, more than 6,000 people have recovered from the disease.
Today falls falls
All these positive points they make sales not pose a real danger this Thursday in the European stock exchanges, as they have not been in the Asian parquets before.
The Shanghai one, a benchmark in China, has declined 0.71% after seven earnings sessions. It is thus 2% to recover everything lost on the 'black Monday' last week.
US futures anticipate a 1% correction on Wall Street. Something normal if you consider that the New York Stock Exchange reached new historical highs for the third consecutive day yesterday.
Tomorrow will be key
European indexes give more ground as the day progresses. The referent EuroStoxx 50 It moves around 3,810 points and separates from its key strengths. But as long as you don't lose 3,755, you won't have to worry.
In the session on Wednesday he managed to exceed the maximum he scored in 2015 at 3,836 points, that is, his “initial goal” as pointed out by Joan Cabrero, director of Strategy for Ecotrader.
But to 'finish the job' you must also exceed the 3,855 units. With this, the equity of the Old Continent will give way to a potential of 10%. This will be key that I get it tomorrow, at the weekly close.
“The breakdown of this important resistance is being accompanied by the overcoming of similar resistance in the Dax 30,” said the expert. The main German stock exchange yesterday reached record levels of all time in almost 13,750 integers. This Thursday falls to 13,650.
Below 9,900
For its part, the Ibex 35 is again under the psychological level of the 9,900 points that yesterday managed to recover, something that it had not done since April 2018. And it even jeopardizes the 9,800 at times.
Despite today's declines, “the bulls have regained control over Spanish equities,” as the technical analyst points out. And is that the index will not show weakness until it falls below 9,700 units.
On this day, Iberdrola It is one of the few values that manage to quote positively thanks to several valuation improvements (target price). But it does so with great difficulty, as do Grifols and Red Eléctrica.
Naturgy, meanwhile, turns down after denying a final agreement with the Egyptian Government to resolve different disputes. As the company has moved, it maintains negotiations with Cairo, but “to date” there is no agreement.
Indra, Ence and Cie Automotive are shown as the worst values of the day, leaving around 3%. The bank also pressures down, with Bankia leaving about 2% and CaixaBank, Santander and Bankia more than 1%.
ArcelorMittal also stands out in the biggest sales of the day, thus following the correction that began yesterday after its recent rally.
Influence of the results
The sharp drops of Inditex (-2%), a blue chip, are not helpful either. And another 'heavyweight' as Telefónica gives in with the same strength.
The competitor of the 'teleco' Orange, on the other hand, it revalued around 2%, being one of the most bullish values in Cac 40, after increasing its profit by 54% in 2019.
In the Parisian parquet the technology consultant Capgemini It is the worst stop: their titles lose 3.5% after the publication of their balance sheet. Aeronautics Airbus moderates its first-minute losses after announcing a loss of 1,362 million euros in the past year, while I lived, which has also been accountable, falls more than 1%.
In the Swiss stock exchange, the private bank Credit Suisse It shows flat despite raising its profits by 69% throughout 2019. In Frankfurt, however, Commerzbank It shoots 6% after reducing theirs.
Barclays It is not at all favored by its accounts: it goes back more than 2% in the London Ftse 100 index despite having increased its profit.
Meanwhile, the airline Norwegian, which today has been equally accountable, drops almost 5%.
Sniace, suspended from trading
Back to the Madrid parquet, Coca-Cola European Partners it is revalued more than 1%. The bottler has increased its net profit and dividend.
And also in the Continuous Market it's time to talk about Sniace: The National Securities Market Commission (CNMV) suspended it yesterday from trading due to its delicate situation.
The oil goes back down
Out of equities, the Petroleum return to negative ground. On the afternoon of yesterday the rebound of the last two days began to moderate due to weekly inventory data in the United States, as explained by Aitor Méndez, IG analyst in Spain. And this Thursday the 'black gold' loses more than 0.5%.
Brent crude, a benchmark in Europe, holds about $ 55 a barrel. So far this year it loses 16% (2020 started at 66 dollars a barrel). And this raw material has been the most affected by the fear of Covid-19.
Yesterday the Organization of Petroleum Exporting Countries (OPEC) warned that the growth in crude oil consumption will be 19% lower this year than estimated so far. Analysts are waiting for the cartel to confirm (or not) that it will increase production cuts.
The euro is still weak
At the same time, in the forex market, the euro fails to bounce at its crossing with the dollar. It is at the low end of April 2017, around 1,087 'green notes'.
A weak aspect different from that shown by pound: revalued and exceeds the level of $ 1.30 that lost at the beginning of the month. And this despite the fact that Sajid Javid has unexpectedly resigned as Minister of Finance of the United Kingdom. The British currency began its rebound on Monday, after knowing the British gross domestic product (GDP) of 2019.
Finally, fixed income reduces its interest in the face of increased demand from investors. The German ten-year bond (bund) places its profitability at -0.39%. Today it has been known that inflation in the German country was 1.7% in January, in line with market forecasts.
Also, the ten-year Spanish 'paper' drops to 0.24%, so the risk premium Spain remains stable under 70 basis points. It has not shown any reaction to the improvement in forecasts of the Spanish economy announced by the European Commission: it believes that it will grow 1.6% this year, in line with government projections.
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