The main European indices followed the worsening in the New York stock exchanges and closed Friday in fall, accumulating losses throughout the week. Analysts attributed the worsening mood in the United States to restoring restrictions imposed by the governor of Texas, one of the states that has suffered the most from covid-19, in an attempt to curb the spread of the pandemic.
The Stoxx Europe 600 pan-continental index ended the day with a 0.39% drop, at 358.32 points, accumulating a devaluation of 1.95% over the week. In Frankfurt, the DAX fell 0.73% to 12089.39 points, while in Paris, the CAC 40 lost 0.18% to 4,909,164 points. In London, the FTSE 100 closed with a gain of 0.20%, at 6,159.30 points, benefiting from the fall of the pound against the dollar.
The reference indexes of the Frankfurt, London and Paris stock exchanges ended the week with accumulated losses of 2.10%, 2.05% and 1.40%, respectively.
– Photo: Francisco Seco / AP
Texas Governor Grett Abbott has announced that he will reinstate restrictions across the state to contain recent increases in the number of cases and hospitalizations related to covid-19. As of today, bars and similar establishments that have more than 51% of their revenues obtained from the sale of alcoholic beverages will have to close. Customers will only be able to place delivery orders or pick up products from stores.
The measure represents yet another obstacle in the process of resuming normalcy in economic activity and worries investors, since the recovery of the global economy is still incipient, after an unprecedented fall in recent months.
Today, the president of the European Central Bank (ECB), Christine Lagarde, said that the worst of the coronavirus crisis may be over for the world, but the road ahead will not be easy. “This recovery will be incomplete and can be transformative,” she said, during an online conference today.
Despite Friday’s negative developments, investor sentiment in the region has been driven by the fact that economic data in continental Europe has improved, while blockages have eased without a sharp increase in coronavirus infections. This is the opinion of Altaf Kassam, head of investment strategy at State Street Global Advisors in Europe.
“In Europe, it appears that there is a genuine improvement in the climate, in the economy, in the approach that central bankers have taken,” said Kassam.
According to the assistant economist at Capital Economics, Franziska Palmas, European assets should show additional appreciation by the end of the year, despite the strong rally they have had in recent weeks.
“Despite the extent of its recovery so far, we believe there is scope for the euro and many eurozone assets to rise further this year,” said Franziska.
The economist predicts a significant increase in the euro, from $ 1.12 currently to $ 1.20 and in European stocks on the MSCI index, of about 9% by the end of the year. “We think that European stocks will continue to outperform the US MSCI. We also expect the 10-year Italian yield to drop a little more from its current level,” he said.