By Geoffrey Smith
Investing.com — european shares briefly hit a new record Monday, while the latest injection of stimulus money in China has been circulating in the veins of the global financial markets, sedating the fears of the virus Covid-19.
The benchmark Euro Stoxx 600 index has reached 432,48 before withdrawing to 431,58 at 11: 55 am. The FTSE 100 in the uk has increased by 0.3%, the German DAX up 0.2% and the CAC 40 French 0.1%, on a day when the exchanges are expected to be moderate due to the closure of markets in the us cash for the holiday of the president.
The actions of the automotive sector were among the main winners after the chinese central bank has reduced its key interest rates and added more short-term liquidity to the local market, while Beijing has also hinted at future tax cuts.
The news was accompanied by reports of a further reduction of new cases of Covid-19 reported in China, as well as a slow death. Other new anecdotal positive have also been reported, since Macao has authorized the re-opening of its casinos from Thursday.
The automotive sector is exposed to the virus in different ways, mainly by the impact on the local sales on the largest market in the world, but also by its supply chain. Kia Motors has closed its three plants in South Korea last week, citing shortages of components at the suppliers in china, while Fiat Chrysler has temporarily closed a factory in Serbia for the same reasons.
The French groups of components Faurecia (PA:EPED) and Valeo SA (PA:VLOF) led the sector higher with gains of 6% and 5.4%, after that Faurecia has posted larger profits than expected for the fourth quarter. The groups of components to the German Schaeffler, Continental (DE:CONG) and Hella have also increased from 2% to 3%.
In other areas, the red ink has been more visible. The group Royal Bank of Scotland (LON:RBS (LON:RBS)), which said last week that he was going to call NatWest, fell by 1.5% due to fears that the british government begins a discount sale of its stake in the bank to fund its ambitious spending plans.
The shares of BAYER AG (DE:BAYGN) fell 2.4% after a new court ruling granting heavy damages to a farmer who claimed that the use of herbicide to dicamba of the German giant of the chemical had ruined their orchards. This creates a second source of risk of litigation, in addition to claims separated against its product Roundup. The two products were developed by Monsanto (NYSE:NYSE:MY), Bayer has agreed to buy in 2017. The shares of Bayer are still up 25% from the lows of last year, but their value has decreased by almost half since 2015.
The asset manager uk Jupiter Fund Management Plc (LON:JUP) has increased by 6.8% to reach its highest level since August 2018 after it announced the acquisition of its smaller competitor Merian, who had been separated from the Old Mutual Group.
The title of Electricité de France SA (PA:EDF), for its part, has reached its highest level since the 12 months, extending its gains after it announced annual results better than expected for 2019, and predicts a further improvement in 2020.
The group of French engineering Alstom SA (PA:ALSO) has reached its highest level in 10 years after you have confirmed that it was in talks to merge with the track unit of Bombardier Inc (TSX:BBDb). This decision comes after the European Commission has canceled its proposed merger with the rail activities of Siemens (SIX:SIEGn) nine months ago.