MILANO – Covid returns to bring a storm on the markets. A “black Friday” is outlined for the European stock exchanges with the price lists all falling sharply on fears related to the discovery of the new variant of coronavirus, announced by the health authorities of South Africa as particularly contagious and capable of dozens of mutations. TO Milano the Ftse Mib drops 3.22%, Frankfurt registers -2.8%, Paris marks -3.6% e London retreated by 2.9%.
As analysts of Unicredit, the effect of the new variant of Covid from South Africa is bringing the classic dynamic of moving money towards safe-haven assets, with Bunds – German government bonds – and Treasury futures – American public bonds – in strong appreciation; while the equity sector and other risky assets move lower. Investors have turned on the “risk-off” mode and sectors such as travel and leisure which are the main suspects to go into distress. Just to name a few, easyJet is losing over 10% in the morning, like Lufthansa, the group Iag over 11%.
At the expense of the renewed fears that the pandemic could block the strong economic recovery is also the energy sector. Investors fear that the new variant could put a new brake on the global recovery and therefore on the demand for commodities. The Petroleum in the morning it is in sharp decline: prices suddenly return to the levels of last July, effectively eliminating the autumn rally, on fears of new lockdowns. Futures on WTI crude oil fell 6.2% to 73.27 dollars a barrel while those on Brent left 5.5% on the ground at 77.7 dollars a barrel. Even the price of the gas, protagonist of a well-known escalation that caused the great repercussion on energy bills, moves downwards: on the square in Amsterdam (reference for the European market) methane has come to lose more than 3%, then it is traded around 90, 5 euros per MwH.
Emmanuel Cau, head of European equities strategy for Barclays, comments that “with markets at historic highs, liquidity dwindling towards the end of the year and Covid cases on the rise again, a decline in shares is logical”. According to the specialist, however, “the resilience of growth and the patient attitude of central banks should continue to provide support in the medium term and investors have the powder on (ie available liquidity) to go back to buying on the downside. The key – concludes Cau – is to understand if vaccines are also effective against variants, or not “.
Coming to Piazza Affari the banking sector collapses, the oil sector suffers profoundly while it returns to raise its head Diasorin, whose activities are linked precisely to medical tests. The only other Milanese blue chip to rise is Tim, which is at the heart of Kkr’s offer proposal for which an important board of directors is meeting today.
All these arguments and concerns have already heavily affected Asian exchanges, where Tokyo closed at -2.53% after also slipping below the three main points. A fall linked above all to the fact that the country considered itself safe due to the vaccinations carried out and the contagion situation. Futures on Wall Street indices are also pointing to the upside, after yesterday the US stock exchange was closed for Thanksgiving.
Instead, it moves downward spread between BTP and Bund: the difference drops to 125 points at the start of the session, compared to 130.7 points at yesterday’s closing. The yield of the Italian 10-year declined as well, which stood at 1%, compared to 1.053 yesterday. Among the currencies, the euro has little movement against the dollar: the single European currency changes hands at 1.1228 (+ 0.1%). On the other hand, a downward trend on the yen with theEuro which falls to 128.63 (-0.5%).
Among the macro data, it records the Istat update on the climate of confidence in November, in Italy. That of consumers dropped from 118.4 to 117.5, while the composite index of business confidence remains essentially stable, going from 115 to 115.1. “In November – comments Istat – the business confidence index remained substantially stable, reflecting heterogeneous trends in judgments and expectations among the economic sectors under investigation. The consumer confidence index recorded a decrease, however remaining at historically high levels . Among the nine component series, expectations on the economic situation of the country, those on the economic situation of the family and opinions on the future possibilities of saving worsen. purchase of durable goods “.
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