A rebound is looming in Europe but uncertainties persist – archyworldys

by Laetitia Volga

PARIS (Reuters) – Major European stock markets are expected to open higher on Monday on cheap buybacks following heavy losses on Friday amid renewed concerns over the course of the COVID-19 pandemic.

According to the first indications available, the Parisian CAC 40 could gain 1% at the opening. The Dax in Frankfurt is quoted up 0.83%, the FTSE in London by 0.99% and the EuroStoxx 50 by 1.19%.

The Stoxx 600 and the CAC 40 on Friday accused their worst weekly results in 13 months due to fears related to the health and economic situation after the discovery of a variant of the coronavirus, called Omicron, whose mutations could potentially make it resistant to vaccines.

Several countries in Europe and Asia have already tightened their travel restrictions as the World Health Organization said on Sunday it was not yet clear whether this variant caused more severe symptoms than other strains.

“It is far too early today to question everything, whether it be the progress of the markets, the return to normalcy of the economy or more generally monetary normalization”, declared John Plassard at Mirabaud.

“It is difficult to see how the American central bank could accelerate its ‘tapering’ and hike its interest rates three times in 2022 (as Goldman Sachs now thinks) if the new Omicron variant were to cause several countries to close their borders and to partially shutting down their economy. But we are not there yet, “he added.

Christine Lagarde told the Italian press on Sunday that the euro area was better prepared to deal with the economic impact of a fifth wave of contamination with the coronavirus or the Omicron variant.

If the trend looks positive, investors will be attentive to any new announcements concerning the pandemic and will also follow the publication of the first estimate of inflation in Germany, expected to rise by 5.5% over one year in November by the Reuters consensus.

A WALL STREET

Wall Street futures indicate an open up 0.4% to 1% after a Friday session weighed down by concerns over the detection of the new variant.

The Dow Jones index lost 2.53% to 34,899.34 points, the S&P 500 lost 2.27% to 4,594.72 points and the Nasdaq Composite 2.23% to 15,491.66 points.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei lost 1.63%, amplifying the losses started on Friday, with investors still worried about the possible damage the Omicron variant of the coronavirus could do to the economy as the Japanese prime minister announced the closure of borders to all foreigners as of Tuesday.

Companies in the travel and transport sectors fell sharply, like the Tokyo Disney Resort Oriental Land leisure complex (-4.76%) or the Central Japan Railway group (-3.95%).

In China, the equity markets are also in the red: the CSI300 is down 0.47% and the Shanghai Composite Index 0.32%.

RATE

On the bond market, the ten-year American gained more than 4 basis points, to 1.5192%, after falling by around 16 points on Friday, unheard of since the start of the pandemic.

CHANGES

In the currency market, the yen and the Swiss franc, which benefited from risk aversion on Friday, are now showing a slight decline as the dollar recovers 0.13% against a benchmark basket after falling by 0, 7%.

The euro was penalized as a result and fell to 1.1277 dollars (-0.35%).

OIL

Oil prices are climbing after Friday’s drop and amid speculation that Opec + may halt production increases in the face of the spread of the Omicron variant.

The barrel of Brent rose 3.8% to 75.48 dollars, after falling 12% on Friday.

US crude (West Texas Intermediate, WTI) is up 4.58% to $ 71.27 per barrel, after losing 13% in the previous session.

(Edited by Matthieu Protard)