Frankfurt (Reuters) – The ongoing fighting in the Middle East is causing nervousness on European stock markets.
The Dax and the EuroStoxx50 were each trading 0.2 percent weaker on Monday morning at 15,161 and 4,128 points respectively.
A ground offensive by the Israeli military in the Gaza Strip is still expected. It is unclear when this could begin. Increasing tensions on the Lebanese-Israeli border also increased concerns about the conflict expanding. “Israel’s dilemma when it comes to how to defend and annihilate Hamas without risking too many civilian casualties and thereby escalating the conflict even further is reflected on the stock market in reluctance, while there is still no panic can be felt,” said Jürgen Molnar, strategist at broker RoboMarkets.
ZLOTY RISE AFTER POLAND ELECTIONS
According to Molnar, the possible pro-European change of government in Poland after the parliamentary election on Sunday limited the nervousness in the market. According to forecasts, the ruling national-conservative party PiS (Law and Justice) no longer has a majority. The Polish currency, the zloty, then gained 1.3 percent to 4.2542 to the euro. The reason is the prospect that if there is a change of government, the previously blocked EU funds for Poland could be released, said Commerzbank expert Ulrich Leuchtmann. A further legislative period for the PiS, on the other hand, increases the possibility that Poland will drift towards an autocratic form of state and society. “In the medium to long term, this path would probably have taken Poland out of the EU, and such a prospect is of course poisonous for investments,” said Leuchtmann.
BITCOIN ON THE RISING
The hope that the first Bitcoin spot ETF would be approved in the USA spurred the most important cryptocurrency, which climbed by almost three percent to around $27,710. According to experts, it is likely to reach the $28,000 mark at the beginning of the week. Other cyber currencies such as Ethereum and Ripple were also up, each gaining around one percent.
The US Securities and Exchange Commission (SEC) does not want to object to the latest ruling in the dispute with crypto asset manager Grayscale. An appeals court in Washington ruled in late August that the SEC should have approved Grayscale’s application to set up the first exchange-traded Bitcoin spot fund. “This may have given investors new fuel for their approval fantasies,” commented Timo Emden from the analysis firm Emden Research. It does not necessarily follow from the ruling that the SEC must approve the spot Bitcoin ETF. However, it could be factored into decisions on similar applications in the future.
COLLAPSE IN DEMAND FOR CORONA VACCINES PUSHES BIONTECH
In terms of individual values, the slump in demand for corona vaccines hit the Mainz-based biotech company BioNTech hard. The shares slipped 6.6 percent. After the US partner Pfizer announced a drastic reduction in its sales and profit targets as well as billions in depreciation a few days ago, Biontech is also examining the effects on its business. The company therefore expects depreciation of up to 900 million euros for the third quarter. This corresponds to half of the gross profit share from the agreement with Pfizer.
On the other hand, the shares of the steel companies Salzgitter and SSAB were in demand, increasing by a good five and 2.5 percent respectively after a buy recommendation. The experts from the major US bank JP Morgan upgraded the stocks to “Neutral” from “Underweight” and to “Overweight” from “Neutral”. The two companies have a relatively large number of contracts on the spot market, which should support their profits in the near future, it said.
(Report by Zuzanna Szymanska; edited by Sabine Wollrab. If you have any questions, please contact our editorial team at [email protected] (for politics and economics) or [email protected] (for companies and markets).)