FRANKFURT (Reuters) – The prospect of more cautious rate hikes in the US and an easing of pandemic restrictions in China are attracting more investors to European stock markets.
Dax and EuroStoxx50 each rose by half a percent to 14,296 and 3886 points on Monday. A mood brightener is also the prospect of further economic stimulus from the government in Beijing, said portfolio manager Thomas Altmann from the investment advisor QC Partners. “These are the signals that investors have been waiting for so long and so eagerly.”
Stockbrokers also pinned hopes on the first meeting between US President Joe Biden and his Chinese colleague Xi Jinping before the summit of the heads of state and government of the 20 largest industrialized and emerging countries (G20), said Jochen Stanzl, chief market analyst at the online broker CMC Markets. “Anything that can provide positive impetus in the ailing relations between the two economic powers is welcome on the market.”
JUST A FLASH IN THE FLAT?
However, Naeem Aslam, chief market analyst at brokerage house AvaTrade, described the recent price gains as a “bear market rally”, i.e. an intermediate high in a longer-term downward trend. It is true that US inflation has recently fallen surprisingly significantly. However, the economy is heading for a major downturn.
Meanwhile, some disillusionment returned to the US stock exchanges after the previous rally. Fed Governor Christopher Waller made sure of this over the weekend, urging stock market traders to pay more attention to the “end point” of the interest rate hikes than to the pace of the individual steps. The US monetary authority sees the end point as “a long way off”. With that, Waller somewhat dampened the euphoria triggered by the sharper than expected fall in consumer prices in the USA last week. US futures fell slightly, pointing to a slow start to trading.
Against this background, the dollar index, which reflects the exchange rate against major currencies, stabilized at 106.85 points. By the end of last week it was down 3.6 percent in response to US inflation data, the sharpest since 13-1/2 years ago.
ROCHE ALZHEIMER REMEDIES FLOP – PRICE COLLAPSE AT MORPHOSYS
Roche took the spotlight in stocks after the pharmaceutical company’s Alzheimer’s drug failed in tests. Roche papers then fell in Zurich by up to 5.7 percent, as much as they were six months ago.
Morphosys, on whose technology the drug is based, was hit even harder. The titles of the German biotech company collapsed by around 32 percent at times and headed for the largest daily loss in the company’s history. At 14.29 euros, they were as cheap as they were last more than twelve years ago. “The last hope for Morphosys has been destroyed,” commented a broker on the test results.
Raised full-year targets, on the other hand, drove Informa. The seminar organizer’s shares rose by more than six percent in London. The company raised both operating profit and revenue targets thanks to a pick-up in demand. Credit Suisse analysts also expected seminar fees to increase in 2023.
Meanwhile, the planned takeover by rival Indivior gave Opiant its biggest price jump in ten years. The drug company’s shares rose 117 percent to $20.62 in premarket US business. The specialist in drugs against drug addiction is said to be offering up to $28 a share for the provider of a drug to treat patients with an overdose.
(Report by Stefanie Geiger and Hakan Ersen, edited by Sabine Ehrhardt. If you have any questions, please contact our editorial team at [email protected] (for politics and economics) or [email protected] (for companies and markets ).)