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European equities: mostly gains after better than expected China data message


PARIS / LONDON / MILAN (dpa-AFX) – Most European stock exchanges reacted with relief to significantly better than expected export data from China on Tuesday. However, profits crumbled somewhat during the course of trading. After the extended Easter weekend, the EuroStoxx 50 (EURO STOXX 50) advanced by 0.62 percent to 2910.65 points around noon. The leading index of the Euro zone nevertheless seamlessly in line with its increase of almost 9 percent from the past trading week. The Spanish IBEX 35 or Italian FTSE MIB (FTSE MIB Italy) also rose on Tuesday.

The French CAC 40 was recently almost unchanged in percentage terms at 4506.25 meters compared to Thursday’s closing level. The London FTSE 100 dropped 0.47 percent to 5815.38 points. The pound, which continued to recover against the US dollar, had a negative impact.

“The Chinese trade data for March is encouraging,” said portfolio manager Thomas Altmann from QC Partners, explaining the predominantly friendly mood at the trading venues. While it was clear that March was not the lowest point in world trade and a further decline would follow in April, “if China came through the pandemic with comparatively little economic input, it would be positive for the global economy”. In the past month, despite the Corona crisis, exports from China only fell by 6.6 percent year-on-year. Analysts had expected an average slump of around 14 percent.

Michael Hewson of CMC Markets UK added that the fact that oil production in May and June should be cut by around 10 million barrels a day, as decided by leading countries in the world on Sunday, is somewhat disappointing. More was expected here. However, the move still helped to stabilize prices.

Meanwhile, the fight against the corona pandemic continues and France, for example, extended its strict exit restrictions by around a month until May 11. At the same time, the aid package against the crisis was increased to around 100 billion euros. In Italy, the infection curve is flattening, but the number of corona deaths is now over 20,000. The exit bans there currently apply until May 3. The EU countries also agreed on a late Thursday evening on an aid package of more than 500 billion euros for workers, companies and particularly crisis-ridden countries.

The pharmaceutical sector grew among the individual sectors, while the real estate and the travel and leisure sectors declined. In the real estate sector, URW’s shares (Unibail-Rodamco) fell particularly sharply after their recent recovery at minus 8.8 percent, followed by the British Hammerson Plc at minus 8 percent.

In the travel sector, Air France-KLM, the airline that was hit hard by the Corona crisis, lost a moderate 0.8 percent. The company is confident that it will receive financial injections from governments in France and the Netherlands. France had already signaled its support. The shares of SAFRAN as bottom of the EuroStoxx with minus 4.6 percent suffered from weak conditions from the USA, where shares of airlines, aircraft manufacturers and their suppliers had given way noticeably on Monday. Airbus (Airbus SE (ex EADS)) fell 1.5 percent.

AB Inbev (Anheuser-Busch InBev) paper rose 1.4 percent in EuroStoxx. The world’s largest beer brewer halved its final dividend for the past financial year to 50 cents per share due to the corona pandemic. Analysts were not surprised and welcomed the move given AB Inbev’s high level of leverage.

Renault’s shares were unable to maintain their early gains and recently fell 0.5 percent. The French carmaker is leaving the partnership with the Chinese car manufacturer Dongfeng. The two agreed to transfer the 50 percent stake in the joint venture to Dongfeng. Financial details were not given. Renault had previously announced that it would not pay a dividend in 2019 due to the Corona crisis and would also like to take advantage of government-guaranteed loans – apparently in the billions.

In addition, some reclassifications moved individual values. UBS lowered the UniCredit share from “Buy” to “Neutral” and almost halved the target price. He is now giving up his last buy recommendation in the Italian banking sector, wrote analyst Ignacio Cerezo. Because of the corona crisis, he fears that profit expectations will drop sharply.

In contrast, his colleague Giovanni Montalti was positive about the Orange share (Orange) and recommended buying it. The UBS analyst justified this with the high reliability in terms of cash flow of the French telecommunications company. The Orange share rose by 1.6 percent.

The STMicroelectronics share certificates also went down 1.3 percent in the Cac 40. JPMorgan analyst Sandeep Deshpande canceled his “Overweight” recommendation for the chip manufacturer and also cut the price target significantly. After the recent significant price recovery, the share is now no longer so attractive in view of the sales sectors that are collapsing due to the Corona crisis, he wrote./ck/mis

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