European markets plunge amid speculation and uncertainty

Paris, Frankfurt and London, which dropped 2.02%, 2.08% and 1.82% respectively, posted their worst weekly performance since the US presidential election in early November.

World markets fell on Friday, with the main European indices lamenting their worst week in three months at the close, after a week when powerful speculative movements stirred the stock markets.

Paris, which dropped 2.02% on Friday, Frankfurt (-2.08%) and London (-1.82%) posted their worst weekly performance since the US presidential election in early November, with respective declines of 2 , 88%, 3.18% and 4.30%. In Zurich, the SMI lost 2.38%.

At mid-session on Wall Street, around 5:20 p.m. GMT, the Dow Jones index on Wall Street lost 1.31%, the Nasdaq 0.98% and the S&P 500 1.23%.

In the midst of a pandemic, but unrelated to the health crisis, a speculative fever seized investors this week. Originally a Wall Street-listed video game store chain, Gamestop.

Its stock rose sharply at the end of last week when an army of amateur investors, using a forum on the Reddit site, decided to buy the stock massively.

These stock marketers have embarked on a battle against large investment funds, which had on the contrary bet down on the title, ultimately destabilizing the entire market.

“If this shock seems anecdotal, it arouses fears of exuberance in the market”, underlines Natixis.

The Wall Street Constable said Friday to “monitor and assess” the situation.

After being reassured Thursday by the fact that several trading platforms imposed restrictions on certain stocks, investors feared Friday a return of volatility after the announcement of a limited resumption of purchases of these securities. Gamestop was still flying 78% in mid-session Friday and 427% over the week.

In addition to this hot issue, uncertainty remained high around the supply of anti-Covid vaccines.

Brussels on Friday adopted a mechanism to control exports outside the EU of vaccines produced there. This decision was taken because of delays in vaccine deliveries from the AstraZeneca laboratory, approved on Friday by the European regulator.

Faced with the shortage of vaccines, the Swiss giant Novartis will help the production of the vaccine from Pfizer and BioNTech. The American Johnson & Johnson told him that his vaccine was 66% effective.

On the macroeconomic side, the pandemic plunged French GDP by 8.3% in 2020 and that of Spain by 11%. German GDP grew slightly, by 0.1% in the fourth quarter.

And the prospect of an immediate recovery seems slim. “There is little hope that growth in the first quarter of 2021 will be impressive” given the restrictions, notes David Madden, analyst for CMC Markets UK.

In the United States, on the other hand, manufacturing activity in the Chicago area climbed in January to its highest since July 2018, household incomes rose again in December, and home sales promises jumped.

Marston’s flies away

The British chain of pubs (+ 10.03% to 82.30 pence) has received a buyout offer from investment fund Platinum Equity Advisors. The company, which is suffering like the rest of the industry from restrictions linked to the pandemic, says it will assess the offer.

Varta and Evotec plunge back

On the other side of the Rhine, the manufacturer of batteries and chargers Varta (-18.81% to 147.20 euros) and the drug researcher Evotec (-12.33% to 32.50 euros) plunged, after having benefited in recent days of a catch-up phenomenon in the wake of the battle around GameStop.

M6 takes off, followed by TF1

The French television and radio group, M6, soared (+ 5.41% to 14.02 euros) after information from Reuters indicating that the German group Bertelsmann offered to sell Altice and Vivendi its share of control in the group. After the closing, RTL Group, a subsidiary of Bertelsmann, took note of the rumors.

In its wake, TF1 rose 2.95% to 7.16 euros.

On the currency and oil side

At around 5:20 p.m. GMT, a barrel of Brent North Sea for delivery in March, which is the last day of trading, gained 0.74% from Thursday’s close, at $ 55.94.

The US barrel of WTI for the same month appreciated 0.27% to 52.48 dollars.

The greenback lost 0.18% against the single European currency, at 1.2146 dollars to the euro.

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