Newsletter
European Markets Unlock as Lockdown Ends

European Markets Unlock as Lockdown Ends

by -

Europe is slowly reopening after two months of lockdowns. Stores, public spaces, schools but also markets are resuming their activity.

Markets have seen a rebound and Germany has even seen a +0.37% gain on Friday.

al_EN_oil_970x250_v2a

However, WHO warned coronavirus cases are developing at an all-time high and might cause European countries to reinstall lockdowns during the summer, causing a new market slowdown.

At the moment, the United Kingdom is predicted to be the most affected country.

UK set to be facing a “historical recession”

With a late start to its lockdown, the United Kingdom has seen an overall belated impact on its markets. On 22 Friday,  the FTSE 100 settled at -0.37%.

However, analysts are worried about the Brexit situation, even though, coronavirus prevented the country from being heavily hindered at first. “The Bank of England said earlier this month that the economy could shrink by 14% this year. That would be the biggest annual contraction since a decline of 15% in 1706, based on the bank’s best estimate of historical data.”, analyzed CNN.

“The UK has an additional problem of the UK-EU negotiations in the second half of the year.” shared Kallum Pickering, senior economist at Berenberg Bank to CNN.

Moreover, Wednesday marked a historical milestone since the country sold a bond of $4.59 billion to the Bank of England at a negative interest rate  of -0.003%.

al_playbook2020_970x250

As a result, the British pound has lost more than 8% of its value since January 2020 to less than $1.22 and fell more than 5% against the euro. Last but not least, the FTSE 100 has lost 21% year-to-date.

Germany remains strong

With a radically different approach and a preventive strategy since 16 March, Germany has managed to keep a strong economy.

Despite a global fear of tensions between China and the United States, the German DAX has ended the week on a positive note: it has shown  a climb of +5.67% reaching the 11.000 point mark milestone, which reassured stockholders.

Read on Alvexo:”COVID-19 Is a Game Changer for Precious Metals

According to experts, a hope for a coronavirus vaccine boosted the German markets. On 22 Friday, DAX closed at an encouraging +7.94%, the strongest gain since the start of the year.

Several stocks have particularly caught professional traders’ interest:  Muench; Rueckvers went back to its January 2018 level with an increase of +1.73% at $192.32.  

Continental AG also showed strong signs, rising +1.63% and was traded at $81.51 .

Vonovia ended the week solidly as well, reaching its highest  value since January at $49.56, therefore gaining +1.41%.

France is slowly stabilizing

With a strategic fostered alliance between Germany and France, Paris markets have shown a stable market, ending the week at -0.02%, reaching 4.444 points .

It is without a surprise that listed companies connected one way or another to the Coronavirus crisis showed the strongest gains.

As a result, the French supermarket chain Carrefour rose 3.08% at $13.21.

Electrical and digital tricolor giant Legrand reached a +3.04% gain and was traded $59.04, while French constructor Compagnie de Saint-Gobain went up 2.84% and ended at $26.81.

80.7% of retail CFD accounts lose money 

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.