Major European stock markets are up Tuesday morning and the euro hit a high since March, with the EU stimulus package providing welcome relief after several days of waiting.
In Paris, the CAC 40 index gained 1.27% to 5,158.01 points around 08:40 GMT. In Frankfurt, the Dax takes 1.83% and in London, the FTSE takes 0.71%.
The EuroStoxx 50 index in the euro zone is up 1.6%, the FTSEurofirst 300 by 1.16% and the Stoxx 600 by 1.15%, to a high since early March.
The leaders of the European Union reached an agreement on a massive stimulus plan for the economy of the bloc, affected by the coronavirus pandemic, at the end of a marathon summit of more than four days in Brussels which took place is concluded Tuesday at dawn.
French President Emmanuel Macron described this plan as truly historic and “likely to respond to the health, economic and social challenges which are now before us in each of our countries”.
“Thanks to this agreement, we believe that the risk of a European rupture has further diminished and that European growth should be sustained in the medium term. The risk premium on European assets should therefore also fall, which supports the markets” , said Esty Dwek, head of market strategies at Natixis Investment Managers Solutions.
“Of course there were compromises and it’s not a perfect deal but the fact that the 27 leaders gave their approval to the EU to jointly issue debt was the hardship that investors were waiting for.” , underlined for his part Sean Darby at Jefferies.
All European sectors are benefiting from investors’ appetite for assets deemed to be riskier. The Stoxx index of banks and the automobile industry gained 3.2% and 2.78% respectively. That of technology takes 1.99%, supported by the progression of IBM after-market (+ 5%) Monday after the publication of a better than expected profit.
At the head of the Stoxx 600, the specialist in temporary work Randstad jumped 9.36% after the decline less pronounced than expected in its quarterly results.
UBS climbs 3.64%, the first wealth manager in the world having announced the possibility of resuming share buybacks later in the year after having generated a decline in profit less sharp than expected.
In Frankfurt, Bayer wins 1.65% after the American court decision to confirm on appeal the verdict in favor of a plaintiff in the Roundup case but which has however reduced by 74% the compensation that the German group will have to pay him .
In Paris, Remy Cointreau is almost stable after taking more than 5% at the start of trading, to a ten-month high, the wines and spirits group having published quarterly sales higher than its expectations and raised its current operating profit target for the first half of the year.
On the downside, the Swiss pharmaceutical group Novartis yields -1% after lowering its outlook for 2020 and showing a decline in sales and profit in the second quarter.
A WALL STREET
The New York Stock Exchange rose on Monday, with a marked rise for the Nasdaq (+ 2.51%) which ended at a closing record with the dynamism of technology stocks, but a much more modest increase for the Dow (+0 , 03%) held back by the decline in industrial stocks.
The larger S & P-500 gained 0.84%.
The news on the front of the epidemic linked to the new coronavirus remains mixed: the number of cases of contamination continues to increase in many American states but several pharmaceutical companies including AstraZeneca and BioNTech have reported promising results during tests on vaccine candidates.
The oil “major” Chevron lost 2.2% after the announcement of the acquisition of Noble Energy (+ 5.44%) for 5 billion dollars.
On the Tokyo Stock Exchange, the Nikkei index gained 0.73%, thanks to the positive trend observed the day before on Wall Street and to new hopes for vaccines against Covid-19.
In China, the main indices ended the session close to equilibrium: the CSI300 of large caps in the country and the composite index in Shanghai gained 0.2%.
When an agreement was announced on the European Union’s stimulus plan, the single currency hit a high since March 9, at 1.1469 dollars, before wiping out its advance, at 1.1443.
“The agreement offers a good buying opportunity but for the moment, we cannot expect a bigger increase. Now, it is above all the recovery of the real economy and the development of the health crisis that will determine performance Overall, we think the euro-dollar around 1.14 is justified, “said Esther Reichelt, currency analyst at Commerzbank.
The dollar gives up 0.2% against a basket of international currencies.
On the bond market, the yield of the ten-year German Bund, the benchmark for the euro zone as a whole, climbed back to less than -0.44% in early trading before reducing its gains and returning to -0.458%.
Italian government bonds remain on the decline, more than four low points for the ten-year period, which has evolved to a low level since March 6, at 1.137%.
In trade in Asia, the yield on Treasuries fell slightly, to around 0.612%.
Oil prices are on the rise thanks to hopes for the development of a vaccine against the coronavirus but concerns related to the increase in cases of contamination are limiting the gains.
The barrel of Brent rose 1.29% to 43.84 dollars and that of US light crude (West Texas Intermediate, WTI) rose 0.91% to 41.18 dollars.