(ABM FN) The Brussels stock exchange cautiously initiated the recovery on Wednesday. At the end of the morning, the Bel20 scored 0.9 percent higher on 3,607.90 points.
The sudden cut in interest rates by 50 basis points by the Federal Reserve did not have the desired effect. The American stock markets ended lower on Tuesday, while the European markets remained reluctant on Wednesday.
According to AvaTrade market analyst Naeem Aslam, investors have seen the Fed’s interest rate cut as a message that “there are serious problems” that they were not aware of.
Aslam believes the Fed was overreacting because the central bank does not yet see much evidence of a new coronavirus liquidity problem, which actually turns out to be a “health issue” and the economic impact is still “very unclear.”
CBC Bank economist Bernard Keppenne finds the Fed’s decision “surprising” because it could certainly have been taken at the next policy meeting and it will certainly not stop the virus from spreading. It also gave a sense of “necessity” that the stock markets certainly did not reassure.
“With the aggressive monetary policy, the Fed has left little room for further reaction,” Asa of AvaTrade further emphasized.
According to Keppenne, the Fed’s decision has opened the door for interest rate cuts by other central banks.
On a European level, Keppenne noted that, given the current low interest rates, the European Central Bank does not have as much room to cut interest rates as the other central banks.
At the macroeconomic level, much attention was paid to the European procurement managers index for the services sector.
The services sector in the eurozone grew slightly faster in February than a month earlier. The purchasing managers’ index, which measures activity, rose fractionally from 52.5 in January to 52.6 in February.
The services sector grew at a slower pace in most European regions. In Italy, on the other hand, the pace of growth increased.
The purchasing managers’ index for the eurozone industry appeared to have risen earlier this week from 47.9 to 49.2. The composite index thus rose on a monthly basis from 51.3 to 51.6.
Chief economist Chris Williamson of Markit spoke of “resilience” at the time of the corona virus. But, the economist warned, if you look deeper, the data shows signs that bears are on the way ahead.
The euro / dollar recorded at 1.1164. Oil prices rose 1.7 percent.
Up and down
The annual figures of Ontex were well received in the main index. The share increased 12.8 percent. As expected, Ontex recorded lower profit and revenue in 2019, partly due to a slowdown in activities in Europe and higher raw material costs. Ontex anticipates a low one-digit comparable revenue growth for the current financial year. For recurring EBITDA, an increase is expected at constant exchange rates to 270 to 275 million euros. According to ING, Ontex is well on the way, with figures that were stronger than expected.
Kepler Cheuvreux sharply lowered the target price for AB InBev from 98.00 to 79.00 euros with unchanged buying advice. According to analysts, AB InBev will continue to face headwinds in various markets, creating uncertainty about long-term profit potential. The share nevertheless rose 1.1 percent.
Barco closed the line with a decrease of 0.9 percent.
Bekaert managed to increase 14.1 percent on the second line. Bekaert achieved a virtually stable turnover in 2019, but saw its operating result rise sharply. Bekaert proposes a stable dividend of 0.70 euros per share. For 2020, Bekaert expects to make further progress in achieving the target of an EBIT margin of 7 percent. Tom Simonts told ABM Financial News that the results “look good”, and that they give no reason to be “more negative” about Bekaert. ING appeared to be talking about the strong results, but also referred to the uncertainty for 2020.
TINC booked more profit and a higher portfolio result in the first half of its broken financial year. TINC aims for a dividend of 0.51 euros per share for the current financial year. The share increased 1.1 percent.
Kepler Cheuvreux lowered the target price for Recticel from 7.50 to 6.50 euros with an unchanged Reducing advice. “After a difficult 2019, the chances for 2020 seem better,” the analysts said. The reorganization and steaming up of the Finnish factory, among others, contribute to this. The share fell 0.4 percent.
Bois Sauvage lost 2.1 percent.
For the smaller stocks, Smartphoto rose 2.7 percent, while ASIT gave biotech 1.5 percent.
ABM Financial News; [email protected]; Editorial staff: +31 (0) 20 26 28 999.
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