Portfolio

Europe midday: Insurers, oil and gas shares pace gains

By Alexander Bueso

Date: Tuesday 24 Mar 2020

Europe midday: Insurers, oil and gas shares pace gains

(Sharecast News) - Stocks are holding near their best levels of the session, helped by reports that US Senate leaders have agreed on a spending plan and that Germany might ramp-up its own stimulus.
As of 1225 GMT, the benchmark Stoxx 600 was ahead by 4.76% to 293.63, alongside a 5.97% jump for the Dax to 9,267.90, while the FTSE Mibtel was ahead by 5.64% at 16,439.15.

Earlier, futures for the S&P 500 had hit 'limit up' and were last rising 95 points to 2,315, while the Dow Jones Industrials was expected to see a near 800 point jump at the start of trading in New York.

Significantly, the VStoxx gauge of volatility for the EuroStoxx 50 was down by 16.75% to 53.66, a possible hint that Tuesday's gains might stick, while gold futures were just below their 52-week highs.

Shares of insurers were wanted, with the Stoxx 600 sector gauge jumping 10%, alongside an advance of 8.2% for Oil & Gas stocks.

"Anyone jumping back in now will need to have nerves of steel," said Craig Erlam, senior market analyst at Oanda.

"Much of Europe is still in the acceleration phase, as is the US, which brings a huge element of uncertainty still, so this volatility is going nowhere."

France's Biom?rieux was adding 4%, having started the day up by more than a third and at a record high, after the US Food and Drug Administration gave the green light to its covid-19 diagnostic kits.

Germany's Qiagen was also 4% higher amid reports that it had begun shipping its covid-19 testing kits to the US.

Norwegian Air was 2% higher after unlocking loan guarantees worth $27m from two creditors, with the government now expected to offer roughly another $240m in cheap financing.

Tuesday's gains were materialising despite survey results showing that economic activity in the single currency bloc was shrinking at its fastest pace since the Great Financial Crisis in what survey compiler IHS Markit termed an "unprecedented collapse".

IHS Markit's so-called composite Eurozone Purchasing Managers' output index fell from February's level of 51.6 to 38.9 in March, just as expected.

However, a separate gauge for services sector activity dropped from 52.6 to 28.4 (consensus: 40.0).

The latest news out of Spain regarding the Covid-19 pandemic was grim.

The country's health ministry reported that the number of new cases in Spain jumped from 33,089 on Monday to 39,673 on Tuesday, even as the number of fatalities jumped from 2,182 to 2,696.

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