Markets tremble under the pressure of news coming from China on the coronavirus, while the WHO corrects the international threat to "low" from "moderate". After the splash of Tokyo, -2%, even the European lists close in deep red and return January's gains with interest, while Wall Street travels in reverse with percentages between -1 and -2%. Stocks of travel-related companies, such as hotels and airlines and the tech sector weigh heavily.
In Europe Milano loses 2,31% (23.416 basis points); Frankfurt -2,73%; Paris -2,68%; Madrid -2,05%; London -2,28%.
Back the Petroleum, after the heavy losses of the last eighth: Brent -2,96%, 58,12 dollars a barrel. On the other hand, safe-haven assets, such as gold, are making a comeback, +0,59% to 1581,15 dollars an ounce. On the secondary side, the BTPs are also stealing after Stefano Bonaccini's victory in Emilia-Romagna, a result that secures the current government and offers the prospect of greater political stability. The spread between ten-year Italian and German falls to 146 basis points (-9,19%) with a yield of the BTP in contraction to 1,04% (that of the Bund drops to -0,42%). This is a good omen for the primary, in view of the auctions by the Ministry of the Treasury which will start tomorrow, with the focus above all on the placement of medium and long-term securities on the agenda for next Thursday. Worth noting is the sharp rise in Greek government bonds after the improvement of the sovereign rating by Fitch which also brought the outlook to "positive".
The excellent performance of Italian paper today helps utilities which, in the general defeat, even win some gains: Italgas +1,03%, on which Kepler raised the recommendation to "buy", with a target price of 6,3 euros from 5,6; Post office +0,47%. The banks defended themselves to the last, but the biggest ones closed down. Ubi limits damage to -0,07%, while Understanding loses 1,01%. Off the main list though Ps rises by 2,74%. All other blue chips are down as of Cnh -6,94%; stm -5,77%, returning from a positive trail; Tenaris -5,01%; Pirelli -4,66%; Prysmian -4,39%; Ferragamo -4,41%; Moncler -4,17%. Luxury stocks are paying in particular for the Chinese paralysis due to the spread of the mysterious virus which has already killed 81 people, infected over two thousand and forced the authorities to tighten a cordon sanitaire around millions of people.
China also agreed over the weekend to extend its Lunar New Year holiday by three days to Feb. 2 in a bid to slow the outbreak and the Shanghai Stock Exchange will reopen on Feb. 3.
Even in Paris, fashion is falling apart, because shopping tourism is seriously at risk. Consider that Chinese tourists in France are 2,5% of the total and their expenditure represents 7%, equal to 4 billion euros
In addition to the health problem, which evokes the ghosts of Sars and its economic and financial repercussions, last week's decisions by Donald Trump on trade tariffs also weigh on the stock markets. On 8 February, in fact, the USA will impose 25% duties on steel derivatives, while aluminum derivatives will be taxed with a further 10%. On the steel front, Argentina, Australia, Brazil, Canada, Mexico and South Korea will be exempt, on the aluminum front Argentina, Australia, Canada and Mexico. In this way derivative products will be affected, from nails to electric cables, up to a series of components for the transport sector - cars such as tractors. Among the Italian companies that could be at risk are Cnh and Tenaris, today heavily penalized in Piazza Affari.
The currency market is flat there'euro-dollar, with the exchange rate around 1,1018.
