Stock market: Europe declining, America and Asia rising

By | May 20, 2020
Stock market: Europe declining, America and Asia rising

The European stock market began in the negative zone last Tuesday. The growth, which took place against the background of news of a new wave of stimulus measures to restore the EU economy after the fall associated with the influence of the coronavirus, stopped.

The STOXX 600 index began to move down and has already lost 0.3%.

In order to keep the eurozone economy from declining further, France and Germany took the initiative to organize a fund for its restoration with a total reserve of 500 billion euros, which corresponds to 543 billion dollars. This fund will have to pay grants to those regions of the EU, as well as individual sectors of the economy that are most affected by the COVID-19 pandemic. Perhaps, this news became decisive during the trading session.

It can be recalled that the previous session was more than successful for the STOXX 600 index and was able to demonstrate the highest growth dynamics, which has not been since the end of March. The main factor that won back was the news about the possible successful creation of a vaccine against coronavirus infection, and, as a result, the continued weakening of quarantine measures in several EU countries.

Meanwhile, the dynamics are mixed in the corporate sector. Securities of Thyssenkrupp AG from Germany went up by 3.56%. The reason was the announcement of the search for partners for several of its units.

Shares of Remy Cointreau SA from France, on the contrary, fell by 4.83% on the back of a move in the Goldman Sachs rating from a “buy” position to the “neutral” level.

The Asia-Pacific stock market, as opposed to the European one, continued to rise, due to the further lifting of quarantine measures in an increasing number of countries in the world. In addition, the news that the coronavirus vaccine has been successfully tested has also seriously stirred the interest of market participants. Fears of investors to make risky deals are gradually disappearing and many began to argue that the pace of economic recovery will accelerate.

The MSCI, excluding Japan, also showed an increase of 1.8%, which allowed it to rise to its maximum value over the past two weeks. Nevertheless, if we talk about the average monthly dynamics of this indicator, then it is still in the negative zone, since the decline was 1.9% for the current month.

The greatest success was recorded in the base index of Australia, Hang Sang Hong Kong and the index of South Korea. The former rose by 2%, while the latter was able to rise by 2.3%. The Blue Chips Index from China also gained 0.8%.

Japan’s Nikkei index was up 2%, while this hang went up to the highest since the beginning of March.

At the same time, the American S&P 500 index became the leader of the increase, its growth was a record 3.15%, which is the highest value in more than six weeks. The Dow Jones industry index is also rapidly growing, its level increased by 3.85%. The Nasdaq Composite Index is also in a positive zone – 2.44% to the previous marks.

One way or another, according to most experts, the positive dynamics in the market cannot be perceived as a long-term trend. Analysts are confident that there will be a rather serious reduction in the world economic growth rate in the near future. In addition, the forecast for 2021 remains very uncertain, data and opinions are constantly changing and adjusting in one direction or another. Therefore, we can be content with the fact that the stock market has caught a wave of positive emotions only at the moment.


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