Register to get unlimited Level 2

Europe close: Shares rally as coronavirus cases continue slowing

By Alexander Bueso

Date: Wednesday 19 Feb 2020

Europe close: Shares rally as coronavirus cases continue slowing

(Sharecast News) - Stocks finished near their best levels of the session, buoyed by news of a further slowdown in the rate of both new and existing coronavirus cases in China.
According to the 29th situation update from the World Health Organisation, the number of total confirmed cases globally stood at 73,332 on Wednesday and the tally of new ones increase by 1,901, versus the previous day's rise of 2,162.

Critically, there were still no "robust" transmission chains outside of the People's Republic of China, explained analysts at ShoreCap.

"European markets are gaining ground this morning, with a slight fall in coronavirus cases providing bulls with yet another reason to buy in despite ongoing fears over the economic implications of this current shutdown," said IG's Josh Mahony.

Despite the still bearish views of some analysts, who were trying to pounce on stocks like hungry alligators, the news out of China was helping to keep market sentiment intact.

By the end of trading, the benchmark Stoxx 600 was ahead by 0.83% to 432.90, alongside a gain of 0.79% to 13,789 for the German Dax while the FTSE Mibtel was ahead by 1.01% to 25,477.55.

Front month Brent crude oil futures were 2.55% higher alongside to $59.26 a barrel on the ICE.

To take note of nonetheless, for some investors what was really keeping markets afloat were reports of further Chinese stimulus.

Earlier, Bloomberg had reported that Chinese authorities were mulling cash injections or mergers to help the country's ailing airlines sector.

Chinese President, Xi Jinping's assertion that China could still meet its 2020 growth targets also reassured some observers.

Shares of athletic apparel maker Puma were at the top of the leaderboard for the Stoxx 600 after the company posted a 20.6% jump in sales in fourth quarter sales to reach €1.48bn, on the back of double-digit growth across all regions and products.

But while its earnings before interest and taxes jumped 46.8% to €55.0m, the firm conceded that it was impossible to forecast the impact that the coronavirus would have on its operations, although it vowed to do everything possible to reduce the short-term effects.

Stock in Deutsche Telekom was close behind after the company reported a 80% jump in full-year net profits to €3.9bn, forecasting a further improvement in earnings before interest, taxes, depreciation and amortisation to €25.5bn in 2020.

NMC Health shares slumped again and were to be found at the bottom of the pile after Czech shareholder and activist investor Krupa Global Investments (KGI) said it would not be taking a strategic stake in the UAE healthcare provider.

Belgian insurer Ageas meanwhile posted a 33.8% drop in its fourth quarter net income to reach €102.0m, so that record full-year net profits of €979m, while 21% higher than a year ago, fell short of the €1.01bn anticipated by the consensus.

The company said that the direct impact of the coronavirus on its Asian operations would be limited but added that its performance could be impacted indirectly via volatility in financial markets and interest rates

The latest batch of economic data was mixed.

On the plus side of the ledger, in seasonally adjusted terms, the single currency bloc's current account surplus rose from €32.42bn in November to €32.56bn for December.

However, according to Eurostat, in month-on-month terms, construction output in the bloc shrank by an outsized 3.1%.


Email this article to a friend

or share it with one of these popular networks:

Top of Page