European stock markets aggravate the risk of a deep correction: the Ibex 35 yields 0.72% and loses 9,500 points

The stock exchanges in Europe are dyed red again because of the Chinese coronavirus. The rebound of the last day did not change the corrective phase they live. The main squares of the Old Continent register generalized sales of 1.5%. The IBEX 35 loses the psychological level of 9,500 points by yielding 0.72% and closes at 9,467.2 points. The selective has moved between an intraday low of 9,439 points and a maximum of 9,528 points. The turnover of the Spanish stock market amounts to 1,150 million in today's day. Siemens Gamesa pays attention after its warning of benefits (profit warning). At closing, the company leaves 9%.

The day was already starting badly for Europe. Some Asian bags have returned to the routine this Thursday after the Lunar New Year celebrations with severe declines. Taiwan's parquet has dropped almost 6%; Hong Kong's Hang Seng index has yielded about 3% and Japan's Nikkei 225, 1.7%. Continental Chinese exchanges will not do so until next week.

“Behind this bad behavior is the reborn fear that the spread of the coronavirus in China it has an important impact on the economies of the region and the world economy as a whole, “Link Securities analysts explain.

“The bulk of the virus continues in China and it is expected that in the short term it will have an effect on the consumption and economic growth of the Asian giant,” said Sergio Avila, IG analyst in Spain. 170 people have already died due to this pneumonia and almost 7,800 have been infected.

The falls will go to more

Thus, fear has spread to Europe, where the parks have fallen around 1.5%. The Ibex 35 has been the least punished index. On the other hand, on Wall Street sales are more moderate.

In this way, it is confirmed that the rebound of the last two sessions did not change anything in the “corrective situation” of the Old Continent stock exchanges, as Joan Cabrero, Ecotrader Strategy Director, anticipated.

“In order for us to talk about short-term strength and a more consolidative than corrective context in the near future, it is necessary that the European indexes manage to close the gap they opened at the beginning of the week downwards,” explains the expert.

Specifically, the selective reference, the EuroStoxx 50, should finish a day above 3,780 points. Today it has yielded 3,700 integers, so the uptick seems complicated. Therefore, you should not rule out “a correction of greater depth”, warns the expert, which can lead to the European index to 3,595 points (and even 3,525 points), which implies additional decreases of 2.5%.

In the case of Ibex 35, the future losses can take you “at least” to 9,225 points, according to Cabrero, without discarding the 9,100 points. The main selective Spanish stock market today has left behind the psychological level of 9,500 integers, and will only give “a sign of strength in the short term” if it recovers 9,562 points.

Siemens Gamesa suffers

At the corporate level, Siemens Gamesa pays attention for its sharp falls. The wind turbine manufacturer released a profit warning late last night (or profit warning): announced provisions for 150 million euros for order delays.

Their actions have started the day with losses of up to 12% that have subsequently moderated, although they have continued to be the ones that lower the most. They have touched a minimum intraday price of 13.85 euros.

Indra (-3.8%), ArcelorMitall (-2.8%) and Amadeus (-2.7%) Meliá Hotels. The bank also does not help with its declines. Santander corrects 1.1% after the 4.4% increases it experienced on Wednesday after presenting results. Although CaixaBank and BBVA (publish tomorrow), together with Bankia has closed in positive. Also today they have rendered accounts Unicaja and Liberbank.

Outside of Spain, Deutsche Bank is one of the best values ​​of the Dax 30 index of the Frankfurt Stock Exchange despite having lost 5,718 million euros in 2019. Its shares soar more than 4%.

It is also worth mentioning that Inditex (-0.35%), one of the 'heavyweights', has failed to avoid falls. Yes, he has done it in the first hours when he is driven by the strong increases of his competitor H&M in the stock exchange of Stockholm. The Swedish fashion firm amounts to about 9% after publishing its accounts.

And these will not be the only companies to report this Thursday. In the United States, Visa balances and the technology giant Amazon are expected at the end of the session. Coca-Cola has published its figures before the opening of the New York Stock Exchange.

BoE's turn

Also, the agenda of the day has been full of references for investors. The main one, the Bank of England meeting (BoE, for its acronym in English), which has maintained interest rates at 0.75% despite the imminent execution of Brexit.

He has done it a day after the US Federal Reserve (Fed) kept the 'price of money' unchanged. A significant percentage of analysts hoped that there would be a rate cut in the United Kingdom, but as Gilles Moëc, an analyst at AXA IM, said, it is a “rather thorny” issue. And more if you take into account that tomorrow the United Kingdom's exit from the European Union (EU) will be official, or what is the same, Brexit.

Given the maintenance of the rates at 0.75%, the pound It revalued strongly and caresses the $ 1.31.

For its part, the euro It grows against the US currency, on the 1.10 'green notes'. The single currency has reacted slightly to the Eurozone unemployment figure relative to December (fell to 7.4%). In Germany, its largest economy, the unemployment rate remains 5% this month.

Fixed rent

Finally, while investors put aside the stock exchanges, they increase their demand for fixed income. The German ten-year bond (bund) consequently reduces its interest to -0.40% in the secondary market. Its Spanish counterpart does it at 0.27%.

Consequently, the risk premium Spain, which measures the differential of both sovereign debts, remains stable below 70 basis points.

Where do the markets move? Ecotrader expert responses to readers