stock markets

Eurozone equities rise as EU leaders push for rescue deal

Agence France-Presse, Agence France-Presse
Eurozone equities rise as EU leaders push for rescue deal

A glass screen reading the word "DAX", the German Stock Market Index is pictured at the stock exchange on March 16, 2020 in Frankfurt am Main, Germany. - The German government said it is planning to shield companies from going under because of the coronavirus pandemic, by suspending legal obligations for firms facing acute liquidity problems to file for bankrupty. The suspension until the end of September is aimed at giving companies breathing space to obtain credit already promised by the government. (Photo by Daniel ROLAND / AFP)

Bourses in Paris and Frankfurt both gain on Monday, July 20. Wall Street also advances, led by the Nasdaq.

Eurozone stock markets pushed higher on Monday, July 20, as European Union leaders labored to pin down a 750-billion-euro ($860-billion) coronavirus rescue package, while tech shares lifted Wall Street.

The euro hit a 4-month dollar peak of $1.1468, before paring its gains as bourses in Paris and Frankfurt both gained. 

Wall Street also advanced, led by the Nasdaq, which jumped 2.5% to a fresh record following another heady session by Amazon, Microsoft, and other tech giants.

A spike in new COVID-19 infections forced fresh containment measures – notably in Australia, Hong Kong, and the United States – and fueled fears of a faltering economic recovery.

Meanwhile, two studies offered fresh hope of a potential vaccine, a development some experts think is necessary for economies to fully recover.

European leaders resumed talks to resolve their deadlock on a huge coronavirus rescue package after a furious row about grants for member states threatened to derail it.

The negotiations by the 27-country bloc followed 3 days and nights of prolonged wrangling that failed to agree on a plan to help drag Europe out of a painful pandemic-induced recession.

“Hopes are high for the deal to get done today, with risk appetite mainly looking intact even if they need another week to finalize the technical details,” said analyst Edward Moya of online currency trading platform Oanda.

Bickering and brokering

French President Emmanuel Macron and German Chancellor Angela Merkel expressed cautious optimism for a deal as the talks resumed on Monday.

“The EU is known for bickering, but it is also known for brokering deals,” said market analyst David Madden at CMC Markets UK.  

Investors are also keeping an eye on Washington, hoping lawmakers will press ahead with fresh stimulus measures for the world’s top economy.

Monday’s Nasdaq surge followed analyst upgrades of several tech giants that have been big winners from the COVID-19 upheaval as more Americans work from home.

Shares of Amazon powered 7.9% higher after Goldman Sachs lifted its price target on the e-commerce giant, estimating North American revenues rose 48% in the 2nd quarter.

Among other large tech companies, Apple rose 2.1%, Google parent Alphabet 3.3%, Microsoft 4.3%, and Tesla 9.5%.

All will report results within the next 10 days.

“Stocks that benefit the most from social distancing and the spreading virus are doing well,” said Karl Haeling of LBBW.

“Investors are hedging their bets by buying stocks that don’t benefit from the economic rebound as much as they benefit from a continuation of high fear surrounding coronavirus.”

Noble Energy rose 5.4% as Chevron announced it would acquire the exploration and production company for $5 billion in the biggest petroleum acquisition since the industry downturn caused by the coronavirus. Chevron dropped 2.2%.

“This is likely the first of many deals to be done as US energy companies will need to consolidate even further,” said Oanda analyst Moya.

Key figures around 8:30 pm GMT
  • New York – Dow: UP less than 0.1% at 26,680.87 (close)
  • New York – S&P 500: UP 0.8% at 3,251.84 (close)
  • New York – Nasdaq: UP 2.5% at 10,767.09 (close)
  • London – FTSE 100: DOWN 0.5% at 6,261.52 (close)
  • Frankfurt – DAX 30: UP 1% at 13,046.92 (close)
  • Paris – CAC 40: UP 0.5% at 5,093.18 (close)
  • EURO STOXX 50: UP 0.7% at 3,388.34 (close)
  • Tokyo – Nikkei 225: UP 0.1% at 22,717.48 (close)
  • Hong Kong – Hang Seng: DOWN 0.1% at 25,057.99 (close)
  • Shanghai – Composite: UP 3.1% at 3,314.15 (close)
  • Euro/dollar: UP at $1.1444 from $1.1428 at 9 pm GMT
  • Dollar/yen: UP at 107.30 yen from 107.02 yen
  • Pound/dollar: UP at $1.2655 from $1.2568
  • Euro/pound: DOWN at 90.42 pence from 90.93
  • West Texas Intermediate: UP 0.5% at $40.81 per barrel
  • Brent North Sea crude: UP 0.3% at $43.28 per barrel