(ABM FN) The Brussels stock exchange started the trading day with optimism on Tuesday. Towards the end of the morning, the Bel20 was 2.2 percent higher at 3,429.30 points, partly thanks to the sharp price increases of index heavyweight AB InBev and ING.
However, it was a quiet morning in Brussels, with little guiding news. Investors focus their attention on the United States for two reasons: the negotiation of a new bailout package and tensions with China.
According to CMC Markets’ market analyst Michael Hewson, the market is supported by the assumption that an agreement will be reached on a second support package. The only question is when this will happen.
Last weekend, US President Donald Trump signed four decrees through an executive order to provide relief for the economic victims of the corona pandemic. While the legal basis of the incentives raises questions, investors have rated it positive.
Investors are also currently on the alert for Chinese retaliation, after US President Donald Trump signed a decree last week to ban the Chinese social media apps TikTok and WeChat in America, while sanctions were imposed on 11 Chinese executives held responsible for curtailing Hong Kong’s relative autonomy.
China responded Monday, but the response was perceived by investors as subdued. Beijing imposed sanctions on 11 Americans, including Texas Republican Senator Ted Cruz and Human Rights Watch Director Kenneth Roth, “for behaving badly on Hong Kong-related issues,” said a Chinese spokesman.
This puts technology stocks under pressure, ING said. The bank expects that China and the US will each work with their own technology and social media system.
“Despite the short-term uncertainty that this is creating around the technology companies, we are still positive about these stocks,” said ING. Although the bank believes that “it is important [is] to spread ”between both countries. ING therefore invests inTencent and Alibaba as well as in Apple, Alphabet and Amazon.
There is little news today on a macroeconomic level. Investors today will be presented with the German ZEW index and the US producer prices.
The euro / dollar was trading at 1.1773. Oil became slightly more expensive.
Gainers and fallers
With a plus of 4.8 percent, ING took the lead among the main stocks, followed by Barco and index heavyweight AB InBev with price gains of 4.3 and 3.8 percent.
Kepler Cheuvreux has increased the price target for ING from 8.60 to 10.60 euros, with an unchanged buy recommendation. The progress that ING makes will lead to a higher reward for the shareholder, says Kepler. The Stock Exchange emphasized that much uncertainty about regulations has been removed and maintained the share on the favorites list. On Monday ING also received fan mail from various analysts.
Ageas has received a 1 euro higher target of 46.00 euro from ING. The bank emphasizes that the Ageas share is currently trading with a “convincing” return of approximately 9 percent, which, in combination with the growing Asian branch, makes Ageas an attractive stock. ING is also pleased with the resumption of the dividend by Ageas. The stock won 2.2 percent.
Barclays lowered the price target for Galapagos from 235.00 to 210.00 euros, on an unchanged Overweight advice. The target price was lowered due to the higher operating costs forecast by the British bank. The advice was maintained at Overweight due to continued progress with filgotinib in the US. The share rose 2.3 percent.
Kepler Cheuvreux increased the target price for Umicore from 32.00 to 34.00 euros, with an unchanged Reduce advice. The analysts believe that there is a “rather” ambitious penetration of electric driving by 2030 into the Umicore share price. This means that the ratio between risk and return does not remain attractive, according to the analysts. The share fell 0.5 percent.
On the second line, EVS rose 5.5 percent, while the National Bank fell 0.8 percent.
In the smaller shares Deceuninck gained 3.1 percent, and Smartphoto lost 2.2 percent.
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