Frankfurt (Reuters) – Because of the deliberations on new ECB aid to combat the economic consequences of the coronavirus, investors are holding back on the German stock market.
The Dax and EuroStoxx50 barely moved on Thursday morning and recorded at 13,338 and 3533 points, respectively.
For the central bank, the expected easing of monetary policy will become a tightrope act, said portfolio manager Thomas Altmann from the wealth advisor QC Partners. “Insufficient increases and extensions could disappoint on the stock market. On the other hand, excessively large increases could give the impression that the economic situation in the euro zone has deteriorated significantly. “
“The ECB is likely to express its concerns about the strong euro today,” said market analyst Milan Cutkovic from the brokerage house Axi. “This won’t slow down the rally. It is more likely that there will be a short-term setback before the common currency moves to the 1.25 level against the US dollar in the coming weeks. ” The common currency was priced at $ 1.2086 on Thursday.
BREXIT DISPUTE – EXTENSION OF EXTENSION
The pound sterling, on the other hand, came under selling pressure after top talks on Brexit failed to bring about a breakout. Britain and the EU merely set a new deadline “by the end of the weekend” for an agreement on future relations. The British currency then fell 0.7 percent each to $ 1.3301 and EUR 1.1004.
“From a negotiating point of view, there is still ‘forever’ time,” said Thomas Gitzel, chief economist at VP Bank. “It only gets really explosive on December 31st, shortly before midnight. That is how long the UK has a grace period. ” Without a free trade agreement, there is a risk of mutual tariffs and distortions being introduced for the economy on both sides of the English Channel at the turn of the year.
Even in the negotiations on further US economic aid an agreement seems a long way off, said Naeem Aslam, chief market analyst of the brokerage house AvaTrade. To buy time, the US House of Representatives passed an emergency budget designed to avert the country’s insolvency.
HELLOFRESH AND OCADO RAISE BUSINESS GOALS
HelloFresh was one of the winners on the German stock market with a price increase of a good six percent. Thanks to a pandemic-related boom in its business, the cooking box provider once again increased its annual targets. One downer, however, is that the margins will decrease somewhat in the coming year, said a stockbroker.
The online grocer Ocado is also seen as a pandemic profiteer and raised its full-year targets again. At 35 percent, sales growth in the past quarter remains below its expectations and the plus in the previous quarter, commented analyst James Grzinic of the Jefferies investment bank. At the same time, Ocado is losing market share. The company’s shares fell three percent in London.
TUI stocks also came under pressure to sell, as they were almost five percent cheaper. The operating profit of around three billion euros and sales of almost eight billion euros are significantly lower than expected, complained a stockbroker.
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