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European stock markets rise on lockdown withdrawal measures

European stock market

The Ibex 35, the main index of the Spanish Stock Market, has gained 2.38% and closed at 6,856.8 points, a level not seen since April 28

The main European stock markets, including the Spanish one, have started the week with substantial rises, encouraged by the gradual withdrawal of confinement measures, the end of the health alert in Japan and the improvement of the confidence of employers in Germany.

In a day without activity in New York and London, investors have put in the background the confirmation that Germany has entered a recession, the tensions between the US and China, and the Hong Kong protests against the security law that Beijing wants to impose.

The Ibex 35, the main index of the Spanish Stock Market, has gained 2.38% and closed at 6,856.8 points, a level not seen since April 28. The accumulated losses so far this year remain at 28.2%.

Tourism companies and airlines have played a fundamental role in the advancement of the Ibex after the government’s announcement that foreign tourists will be able to travel to Spain from July.

Four tourism companies have led the rises in the Spanish stock market today, with two hotel chains in the top positions.

NH Hotels is up 27.04%; Meliá Hotels, 26.58%; the online travel agency eDreams, 20.85%; and the IAG group, which includes airlines such as Iberia, Vueling or British Airways, 13.41%. Meliá has starred in the largest rise in the Ibex and IAG, the second.

The airport manager Aena, of 4.91%, and the company of technological solutions for tourism, Amadeus, of 4.73%, have also experienced significant increases.

In the rest of Europe, Frankfurt has risen 2.87%; Paris, 2.15%; and Milan, 1.61%.

Previously, in Asia, Tokyo had gained 1.73%; Seoul, 1.24%; and Hong Kong, 0.1%.

The rise in Tokyo came after the Japanese government’s decision to lift the health alert in the capital and in four other prefectures, the only territories in which this exceptional measure was still in force.

The Hong Kong stock market has closed in green – practically flat – despite protests against the security law that the Chinese government wants to impose on the former British colony.

According to Fátima Herranz, analyst at Singular Bank, the increases in European markets have been supported by the improvement of business confidence in Germany -according to the IFO indicator- and in the statements of the director of Public Health of the World Organization of Health (WHO), María Neira, who considers a second wave of the coronavirus epidemic less and less likely.

In his opinion, the confirmation that the German economy contracted 2.2% in the first quarter and the tensions between Washington and Beijing have not weighed on investors’ spirits.

Chinese Foreign Minister Wang Yi said this weekend that the United States is bringing relations between the two countries to the “brink of a new cold war.”

In the oil market, Brent, the benchmark crude in Europe, rose 1.1% to $ 35.5 per barrel, while West Texas Intermediate (WTI), a benchmark in the US, became more expensive by 1, 3% and is close to $ 34 a barrel.

The price of gold, one of the assets considered to be the safest, falls 0.5% to $ 1,727 per ounce.

In the debt market, the interest demanded on the Spanish 10-year bond, the benchmark, falls to 0.685%, while the risk premium (profitability difference with the German bond of the same term) relaxes to 118 basis points.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

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