EUROPE ENDS IN FALL
by Laetitia Volga
PARIS (Reuters) – European stock markets ended sharply lower on Wednesday, with the second wave of the coronavirus epidemic raising fears of a tightening of restrictive measures that could harm the already fragile economic recovery.
The CAC 40 lost 3.37% to 4,571.12 points, a closing low since the end of May. This is the worst daily performance of the Paris index since September 21.
The British Footsie lost 2.55% and the German Dax dropped 4.17%.
The EuroStoxx 50 index fell 3.49%, the FTSEurofirst 300 fell 3.1% and the Stoxx 600 fell 2.95%.
Faced with the rapid progression of the coronavirus, new restrictions should be introduced by certain European countries including France where Emmanuel Macron could announce this evening traffic restriction measures that can go as far as an almost general reconfinement of the country.
In Germany, the federal state and the Länder have agreed on the establishment of a four-week reconfinement from November 2 which will include the closure of bars and restaurants.
The US presidential election on November 3 reinforces the climate of uncertainty. The CBOE index which measures the implied volatility of the S & P-500 reached a high since the beginning of September.
If former Vice President Joe Biden is still one step ahead of Donald Trump, the gap is narrowing in some states deemed decisive.
VALUES IN EUROPE
In this context, the quarterly results of companies which continue to rain take a back seat.
The only CAC 40 value on the rise, Teleperformance gained 0.51%. The leader in call centers is benefiting from the rise in teleworking and has also announced the acquisition of the online health platform Health Advocate.
On the downside, PSA lost 4.54% despite a limited decline in its quarterly sales, Sodexo sold 3.82% after the announcement of an employment safeguard plan and Sopra Steria fell 12.92% after a third quarter penalized by the fall in activity in aeronautics.
Unibail-Rodamco-Westfield and Fnac Darty, which would have a lot to lose from a reconfinement in France, dropped 6.53% and 12.87% respectively.
Unable to give annual forecasts with the health crisis, Puma lost 3.75% in Frankfurt and Beierdorf gave up 6.49% after forecasts deemed too cautious.
The most economically sensitive compartments are the most affected by the market decline: the Stoxx automotive index lost 4.81%, that of banks 3.56% and that of energy 2.92% with the fall in crude oil prices.
AT WALL STREET
The three Wall Street indices were losing around 3% each at the time of the European close. The CBOE index which measures the implied volatility of the S & P-500 climbs to its highest since June 15.
The technology sector, which has a significant impact on the rating, lost 3.57%.
The companies impacted in the first place by the pandemic are in decline, like the airline company American Airlines (-2.27%) or the cruise operator Carnival (-7.84%).
Boeing dropped 3.01%, the aircraft manufacturer having posted its fourth consecutive quarterly loss.
The oil market is down sharply, to a low since early October, as the surge in crude stocks in the United States and that of coronavirus contaminations fuel fears of an oversupply and demand for more fuel. low.
Brent fell 5.29% to $ 39.02 per barrel and US light crude fell 5.91% to $ 37.23.
Faced with the global economic uncertainty triggered by the coronavirus, investors are falling back on assets deemed safer such as sovereign bonds.
The European Central Bank’s announcements following its monetary policy meeting are scheduled for Thursday at 11:45 GMT but markets are anticipating a status quo on both interest rates and quantitative easing, with expectations focusing on the press conference of its president, Christine Lagarde, from 12:30 GMT.
“The pressure will go increasing on the ECB so that it takes new support measures but, objectively, it is difficult to see what effective weapon it could draw against the pandemic”, declared the economists of Saxo Bank.
The yield on the ten-year German Bund, the benchmark rate for the euro zone, fell to a low since mid-March at -0.646%.
That of Treasuries fell to 0.7676%.
The yen strengthens against the dollar to move closer to a six-month high reached last month.
The euro fell to $ 1.1748 and hit a ten-day low at 1.1716 in session, penalized by expectations of reconfinement from France and Germany.
The dollar, for its part, fully plays its role as a safe haven with an increase of 0.53% against a basket of benchmark currencies.
(Laetitia Volga, edited by Jean-Michel Bélot)
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