Business Europe remains cautious, fears over coronavirus persist

Europe remains cautious, fears over coronavirus persist

EUROPEAN SCHOLARSHIPS ON THE RISE CAREFULLY AT OPENING

by Laetitia Volga

PARIS (Reuters) – The main European stock markets were up cautiously on Tuesday, with the exception of Paris, which was in decline, caught between concerns about the health development of the pandemic and its impact on the recovery of economic activity and many business results.

In Paris, the CAC 40 index lost -0.1% to 4,485.57 points around 08:40 GMT. In Frankfurt, the Dax is gaining 0.1% and in London, the FTSE is gaining 0.33%.

The EuroStoxx 50 index of the euro zone takes 0.16%, the FTSEurofirst 300 advances by 0.23% and the Stoxx 600 by 0.25%.

The market remains very nervous about the risk of a second wave of contamination which has already led to global stocks in the red on Monday.

The announcement of a resumption of new cases of contamination in several countries having undertaken their deconfinement, and in particular in the city of Wuhan in China, cradle of the pandemic, has dampened hopes of a recovery in the economy after several months to shut down.

“As long as there is no more visibility on the long-term economic consequences of the crisis and on the evolution of the health situation, the stock market is not immune to a strong tumble as this was the case yesterday. So we are staying in a pattern where prudence must still be the watchword because the market low point has certainly not yet been reached, “said Saxo Bank.

Investors are also attentive to the development of trade relations between the United States and China. US President Donald Trump said on Monday that he opposed a renegotiation of the “phase 1” trade agreement signed in January with China, after an official Chinese newspaper reported that advisers in Beijing were calling for further discussions and possible revision of the agreement.

VALUES

Among the many companies that published their profit and loss accounts before the opening of the markets, Engie lost 3.20% after the announcement of first quarter results penalized by the first impacts of the coronavirus.

CGG fell 9.00%, with the oil services group reporting a net loss of $ 98.4 million (89.6 million euros) in the first quarter.

Biotech Genfit collapses by 70.00% after announcing the failure of a clinical trial in the treatment of a liver disease, NASH.

Up, Iliad takes 3.80% thanks to the increase in its quarterly turnover and Alstom advances by 5.63% after annual results in line with expectations.

In London, Vodafone gained 5.84% after the publication of an annual operating profit in line with expectations and confirmation of the payment of the dividend.

Leading the Stoxx 600, ProSiebenSat.1 Media jumped 14.46% after the announcement by the American fund KKR of the acquisition of a 5.2% stake in the German television group which it held alongside of Permira until 2014.

IN ASIA

The Tokyo Stock Exchange fell 0.12% at the end of a volatile session marked by a wait-and-see attitude before a series of publications of corporate results after the close.

In China, the composite index of the Shanghai Stock Exchange ended almost in equilibrium (-0.1%) and the Hong Kong Stock Exchange lost 1.5%.

A WALL STREET

Futures on the American indices signal for the time being a decline of 0.2% for S & P-500, 0.3% for the Dow Jones and almost in equilibrium for the Nasdaq.

On Monday, the Dow Jones index lost 0.45%, the S & P-500 ended almost stable (+ 0.01%) while the Nasdaq Composite advanced 0.78% supported by the progression of technological stocks and health.

The S&P 500 and the Dow Jones remain at less than 20% of the records reached in February, while the Nasdaq is less than 10% of its closing record.

RATE

The renewed prudence of investors is reflected in a decline in US bond yields, the 10-year Treasuries rate falling by two basis points, falling to 0.6986%.

In Europe, the yield on the German ten-year Bund rose for its part, to -0.496%.

CHANGES

The dollar stabilizes against a basket of international currencies after having reached a peak of more than two weeks at the start of trade, taking advantage of its safe haven quality while investors are worried about the increase in the number of coronavirus contaminations in some country.

The euro climbed very modestly, to 1.0817 dollars.

Forex traders will monitor the actions of Federal Reserve officials James Bullard and Patrick Harker at 1:00 p.m. GMT and 2:00 p.m. GMT respectively, before a much-anticipated speech by Federal Reserve Chairman Jerome Powell scheduled for Wednesday.

The Fed announced Monday evening that it would begin this Tuesday to buy ETF index funds invested in corporate bonds.

OIL

Oil prices are up after Saudi Arabia’s unexpected announcement to cut production by another million barrels in June as the market faces both an oversupply and weak demand.

Brent crude oil advances 0.94%, close to $ 30 a barrel, and light American crude oil advances 2.65% to $ 24.78.

(Laetitia Volga, edited by Blandine Hénault)

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