“Never has a rule produced so much damage in such a short time”. This is the epitaph that the Financial Times dedicates to the automatic mechanism for automatically blocking trading on the Stock Exchange in the event of a fall of more than 7% introduced by China on January 4 and canceled yesterday afternoon after another day of panic on all markets. An about-face that undermines what little remains of the credibility of the Beijing authorities in the financial field but which still calmed the storm.
This morning both the Shanghai Stock Exchange (+2,4%) and that of Shenzhen (+1,7%) recorded strong increases. Volatility is high but helps the stability of the yuan exchange rate (+0,02% to 6,5636 against the dollar) after the drop in recent days. In December, the latest data reveal, Chinese reserves (3.300 billion dollars) fell by 100 billion in an attempt to curb capital flight. In the whole of 2015 the decrease was 512,66 billion.
The crisis was buffered, but not resolved, as demonstrated by the performance of the other Asian markets. Tokyo, after recovering in the morning, then took the downward path again, closing at -0,4%. The first week of the year closed down by 7%, the worst result since 1997.
Same script in Sydney, down 0,4% (-5,7% since Monday) after attempting a rebound. Hong Kong +1,1%.
S&P DOWN 5% SINCE MONDAY. OIL AT 12 YEAR LOW
Even the European and US lists will try to correct the devastating effects of the financial tsunami at the beginning of the year, the worst in the history of Wall Street. But the losses were really heavy.
The S&P closed down 2,4% yesterday. Since Monday, the decline is 4,9% against -5,2% of the Dow Jones (yesterday -2,3%), the most negative data since the birth of the index in 1928. Things went worse at the Nasdaq: -3 %, in the week so far -6%, under the pressure of sales on Apple (-4,2%), affected by the crisis in the Chinese market, and Amazon (-3,7%). The fall of JP Morgan (-4%) was also heavy.
The volatility of oil prices was also very strong, fluctuating during the day between 32,16 (the minimum since 2004) and 34,40 dollars at the end of the session, in any case down by 7,7% since the beginning of the year. Meanwhile, the World Bank has revised its growth estimates downwards for the third consecutive year: +2,9% (-0,4% on the previous figure).
MILAN LIMITS DAMAGES. THE BTP/BUND SPREAD AT 100 BP
A mixed opening is looming for the European stock exchanges, after yesterday afternoon's recovery attempt. Futures report: London +1bp to 5955; Paris -2bp to 4381; Frankfurt -49bp to 9930.
Yesterday in Milan, the FtseMib index closed the session down by 1,14%, at 20.189 points. In the first stages it had scored the lowest level since January last year at 19.630 points with a decline of more than 3%. The other markets of the Old Continent also limited the decline in the finale. But the balance remains in the red for all: Frankfurt -2,29%, London -1,96%, Paris -1,72%. During the session the European indices came to touch double losses.
Yesterday, however, the purchases rewarded the "core" government bonds of the Eurozone. The yield on the 10-year BTP fell to 1,50%, the lowest level since the beginning of December, with the spread at 100 basis points. The Treasury announced the offer of 7 billion 12-month BOTs in next Tuesday's auction.
HOLDS UTILITIES DAM
In Piazza Affari, only eight blue chips closed higher against 32 lower. Among the stocks in positive territory, 5 are part of the utility sector. Snam +0,1% thanks to the promotion of Golman Sachs. The stake held by Eni fell to 4,966% as at 28 December 2015 from the previous 8,537% after the conversion of the bond issued by the company against the securities of the former subsidiary.
A2A gains 1,1%, Terna +0,3% after RBC Capital Markets raised the target price to 4,75 euro from 4,50 euro, confirming the Sector Perform recommendation (it will behave like the reference sector) . Goldman Sachs analysts also raised the target price to 4,65 euros from the previous 4 euros, however confirming the Sell rating. Enel (+0,4%) and Enel Green Power (+0,8%) are also up.
RECOVER THE ENI, TENARIS AND SAIPEM NO
Roller coaster day for oil. Eni closed at -0,76% after having reached a minimum of 12,32 euros in the first few moments, the lowest price since November 2011. The companies linked to services for the industry of the sector did worse: Tenaris -2,84, 1,77%, Saipem -7,3%, Trevi -XNUMX%.
LUXURY RAISES ITS HEAD. AND OLD SHOPPING
The rebound in luxury from the lows under the pressure of the crisis of the "customer" China was also vigorous in the evening. Ferragamo +2,5%, after the sharp declines of recent days, was the best blue chip in closing. The Florentine maison turned sharply higher after reaching the new lows since November 2014 at 18,50 euros in the morning. Yoox +2%.
Luxottica -1,04%. Once again Leonardo Del Vecchio took advantage of the market tensions to round off his grip on the company: on 4 and 5 January last, the entrepreneur bought, through the subsidiary Delfin, 665.000 shares, equal to 0,137% of the capital, for a total investment of 38,7 million.
UNICREDIT ON THE ROLLER COASTER, MANAGEMENT SUFFERS
The banks are in deep red after a day of high tension. Montepaschi (-3,3%) has sunk to a new all-time low. Unicredit opened down 8%, to close at -2,5%. Understanding -1,7%. Heavy losses also for asset management: Azimut -2,8%, Anima -4%, Banca Mediolanum -2,5%. Generali is doing well (-0,19%).
FINMECCANICA FLYES, AUTOMOTIVE SHIFTS
Among the few positive blue chips are Telecom Italia (+0,45%) and Finmeccanica (+0,4%) at 12,60 euros from a minimum of 12,17 euros. The French Defense Ministry has announced a new order for 7 NH90 helicopters from the French-Italian-Dutch consortium NH Industries participated by Airbus, Finmeccanica Elicotteri and Fokker.
New stormy session instead for FCA (-3,3%) ballasted by news coming from Brazil. According to the Brazilian association of auto manufacturers Anfavea, auto production decreased by 18,4% in December.
Ferrari also slows down (-3,2%). Exor (-1,19%) and Piero Ferrari have tied their stakes in the car manufacturer to a syndicate agreement, but the holding company of the Agnelli family is in fact free to sell the stake to a third party even without the consent of the partner. This is what emerges in a document filed by the Sec. Cnh Industrial also fell sharply (-1,19).
In the rest of the automotive sector, Brembo -5,81%.
