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French stock market resilient as Buffett rules out selling shares - live updates

Discussion in 'Market News' started by Lily, Nov 16, 2015.

  1. Lily

    Lily Forum Member

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    All the day’s economic and financial news, as Paris investors refuse to panic after Friday’s attacks


    6.30pm GMT

    Luxury goods stocks in France were also under pressure, including Hermes.

    Fund manager Gregoire Laverne at Roche Brune Asset Management told Reuters: “Paris is one of the most important cities worldwide in terms of luxury spending, and the timing [of the attacks] is not good too - a few weeks before Christmas, the most important period for retailers. These attacks will definitely have a long term negative effect on the tourism sector in France.”

    5.31pm GMT

    The predicted slump in stock markets in the wake of Friday’s atrocities in France proved short lived. By the close of play in Europe most markets were in positive territory, with even France edging only marginally lower. Travel and leisure stocks came under pressure, inevitably, on concerns about the effect of the attacks on consumer sentiment, not to mention the prospect of border controls and increased security. But defence companies moved higher amid a step up in military activity in Syria. Commerzbank economist Peter Dixon told Reuters: “The markets have learnt to realised that the attacks tend to have very limited impact upon the economy and markets.”

    Also adding support was the idea that the European Central Bank was even more likely to unveil further measures to stimulate the flagging eurozone economy at its meeting in December.

    4.22pm GMT

    Here’s the full report from Bloomberg on the comments from ECB board member Peter Praet:

    Praet said the Paris terror attacks may pose a risk to the euro area’s sluggish revival and policy makers will need to monitor data on economic confidence closely.

    “Usually these sorts of events have a transitory effect on the economy so this is not a priori a reason to change the way we see the evolution of the European economy,” Praet said in an interview with Bloomberg Television on Monday in Frankfurt. “It’s also true on the other hand that we have a fragile cyclical recovery, fragile with downside risk, and it’s clear these sort of events do not help restoring confidence in the recovery, so this is something we will watch.”

    The ECB already plans to discuss fresh stimulus measures next month as a global slowdown in trade threatens to stem the currency bloc’s upturn and undermine an inflation rate that is stuck well below its goal....

    Praet said policy makers will “closely” study incoming economic data, in particular consumer confidence, over the coming days and weeks. Euro-area confidence indicators are due to be released by the European Union’s statistics office on November 27. The ECB’s next monetary-policy meeting is scheduled for December 3 in Frankfurt.

    3.59pm GMT

    Early stock market falls have encouraged investors to come back in and buy at the lower levels, said Chris Beauchamp, senior market analyst at IG:


    Markets in Europe, the UK and the US have spent the day recovering losses, as investors digested the impact of Friday’s events. Most European indices started the day firmly in the red, but since then we have seen these losses disappear, to be replaced with dip-buying.

    Across stock markets, travel firms have borne the brunt of the selling, with Carnival, TUI and Intercontinental Hotels all down in London today. Overall the economic backdrop has changed little from the end of last week, when indices took heavy losses, but it seems that once again many had simply been waiting for a sufficiently impressive run of losses to occur before buying once again.

    3.46pm GMT

    The chief economist of the European Central Bank, Peter Praet, has told Bloomberg TV that the bank will be watching the next consumer confidence figures carefully in the wake of the Paris attacks.

    The bank has already hinted it might take further stimulus measures at its December meeting, to boost the flagging eurozone economy. Any signs of weakening confidence could make such a move more likely.

    3.31pm GMT

    After an early gain, crude prices are back in negative territory as worries about falling demand outweighed concerns about supply disruptions in the Middle East.

    Traders said that the Paris attacks were likel to have an impact on travel and thus demand for oil, while news that Japan had fallen back into recession reinforced the general perception of a slowing global economy.

    Brent back to $42.5/bl lows? pic.twitter.com/f5KqmDVMUS

    2.45pm GMT

    US markets have moved ahead in early trading, despite the Paris attacks, with investors seeming to believe they will only have a short term economic impact.

    The Dow Jones Industrial Average is currently up 51 points or 0.29% while the S&P 500 has climbed arouind 0.5%.

    2.37pm GMT

    Here’s some charts showing previous market reactions to acts of terrorism:

    Impact of Terrorism on Stock Markets varies. Update describes the variables and what this means for SPX. . pic.twitter.com/cmFmtjqEtk

    2.21pm GMT

    Investors have knocked more than €2.5bn off the combined value of Europe’s largest tourism firms so far today.

    Most of today’s selloff has been focused on companies on the Travel & Leisure portion of the STOXX 600 index, which has fallen by 1.5% today.

    “Paris is one of the most important cities worldwide in terms of luxury spending and the timing is not good too - a few weeks before Christmas, the most important period for retailers.”

    2.07pm GMT

    After a resolute start, the French stock market has now dipped back into the red.

    The CAC 40 is now down 25 points, or 0.5%, at 4,782.

    1.37pm GMT

    CNBC is doing a fine job finding billionaires who aren’t panicking over France.

    Wilbur Ross, whose investment firm is a big player in Europe, told the TV station that he doesn’t expect markets to suffer heavy falls, saying:

    “I don’ t think this will provoke anything like a 10 percent market crack”.

    1.17pm GMT

    CNCB has now published Warren Buffett’s comments about France:

    Billionaire Warren Buffett said Monday the terrorist attacks in Paris won’t change his investment decisions.

    “I’m not selling any securities because of the attacks in Paris, not at all,” he said in a phone interview with CNBC.

    1.13pm GMT

    Around two centuries ago, Nathan Rothschild apparently remarked that investors should buy on the sound of cannons, and sell when the victory trumpets are sounded.

    And unsentimental investors remember his advice today, buying into defence stocks today on anticipation of more military action in Syria.

    12.45pm GMT

    Warren Buffett, the world’s third-richest man, says the attacks in France won’t affect his investments:

    Berkshire's Buffett to CNBC: "I'm not selling any securities because of the attacks in Paris - not at all."

    12.32pm GMT

    The euro has shed around 0.5% against the US dollar this morning, falling close to its lowest level since April.

    #Euro nears six-month low as #ParisAttacks stoke economic concern https://t.co/Roft5hX31T via @worrachate pic.twitter.com/oalPvKyXkz

    12.10pm GMT

    Here’s what’s up and down across the European markets today:

    Stock markets eke out gains in Europe as oil and precious metals rise https://t.co/AUzuFIshoi via @business pic.twitter.com/TxpMSeOxm0

    11.39am GMT

    Joshua Mahony, market analyst at IG, agrees that economic confidence could be hit:

    While the total human impact is immeasurable, the economic shockwaves to the French economy could include reduced investment, consumer spending and confidence for an economy that is already under pressure.

    11.08am GMT

    The vice-president of the European Central Bank has warned that Friday night’s terror attacks could hit investor confidence in Europe.

    “It can compound all the problems that we were already facing.

    “Forthcoming events ... will impact confidence and possible risk aversion.

    ‘Too early to assess economic impact of Paris attacks’ – ECB’s Constancio https://t.co/fyjqoZrYBh #forex, #forextrading

    10.54am GMT

    City analyst Ipek Ozkardeskaya, of London Capital Markets, explains why hotel and airline stock have fallen today:

    Rising terrorist threats will certainly impact tourist arrivals to big European cities as Paris, London and Berlin before the festive Christmas period.

    #Paris Attacks mark the European session, Japanese economy contracts https://t.co/qc0D2ZDK8T

    10.51am GMT

    Leisure analyst Mark Brumby tweets that French consumer spending is likely to dip:

    Terrorism + leisure travel. Great shame to have to say again that the two don’t mix. Plans, even if only at the margin, will be changed

    Overall leisure spending. People spend less when glued to the TV. Could be 9-11 or a General Election but spending will be depressed

    10.27am GMT

    The oil price has jumped around 1% this morning, helping to drive up shares in energy companies.

    9.35am GMT

    There’s general relief that markets are defying expectations and shrugging off the terror threat:

    Mike van Dulken, head of research at Accendo Markets, sums up the mood:

    “Equity markets positive this morning, showing solidarity and resilience in the face of adversity with the Parisian bourse the standout performer in a message of unity to those who terrorized it this weekend.”

    9.29am GMT

    Investors had been braced for a volatile trading day - but in the event, there’s less drama than feared (so far).

    Stoxx 600 has turned around 90 minutes into trade, now up 0.2%, travel, airline and luxury stocks still mostly lower though @CNBCWEX

    French hotel group @Accorhotels leads falling stocks this morning with 8% decline. Also down: airlines, luxury stocks. #ParisAttacks

    9.17am GMT

    Virtually every European travel stock is down today, with Air France leading the selloff:

    9.12am GMT

    Here’s resilience for you – the French CAC 40 just shrugged off all its early selloff, and is now slightly higher.

    9.05am GMT

    Analyst at French bank BNP Paribas report that “markets have opened generally cautiously after the tragic events in Paris”.

    8.50am GMT

    Kit Juckes, chief currency strategist at French bank Société Générale, is hopeful that the country’s economy will not be badly hit by Friday’s attack:

    He writes:

    I am struck that the reaction to such atrocities has changed a lot since the attacks on New York, Washington DC, and the skies above America in September 2001. Then, we stood and stared, in shock. The US and the global economy were slowing before the World Trade Centre towers collapsed and the emotional reaction made sure the outcome was severe. But we’ve moved on. More appalled than shocked.

    Simon Kuper, the FT journalist who lives in the 11e arrondissement near the Bataclan concert venue that was the epicentre of the tragedy, wrote that his 9-year-old daughter is calm because “We’re used to this now”.

    8.37am GMT

    It does appear that Europe will avoid a major selloff this morning.

    Connor Campbell of City firm SpreadEx reports:

    In a sign of resilience there is no sign of the panicked trading that could have been justifiably expected from the European indices.

    8.30am GMT

    Hotel group Accor dropped by 7% at the open.

    Luxury groups Hermes, LVMH and Kering, which get a large part of their sales from foreign tourists in Paris, were both down about 3%, Reuters points out.

    8.22am GMT

    Travel stocks are bearing the brunt of this morning’s selloff, reflecting concerns that European tourism will be hit by fears over terrorism.

    Air France’s shares dropped 5% in early trading, while Eurotunnel is down over 3%.

    8.07am GMT

    Trading is underway at the French stock market, and shares are falling - but it’s not a major rout.

    The CAC 40, made up of France’s biggest blue-chip companies, has lost 1.1% at the open, as investors in Paris are get their first opportunity to react to Friday night’s attacks.

    Following the tragic events in France on Friday evening and after losses were noticed throughout the Asian markets overnight, expectations are high that the global markets are going to remain under pressure as trading for the week gets under way.

    The tragic events in France are likely to weigh on investor sentiment and will probably encourage some risk aversion from investors. Investor sentiment towards global markets was already looking shaky as last week concluded, and the recent events are going to weigh further on this.

    7.59am GMT

    French government bonds are rising in value this morning - probably a sign that investors are a little more nervous.

    This has pushed down the interest rate, or yield, on French debt (yields fall when prices rise)

    #France's bonds advance as country bombs Islamic State targets. 10yr yields drop to 0.87%. https://t.co/aH0GRo7RdD pic.twitter.com/1voEqDbcX9

    7.55am GMT

    The euro has weakened a little overnight (down 0.25%), reflecting concerns that Europe’s already-fragile recovery is going to be knocked back.

    The gold price has gained 1%, though, to $1,095 per ounce:

    Risk off, gold up following Paris attacks. pic.twitter.com/pV3wQUdytT

    7.36am GMT

    Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

    European markets are expected to fall today, following Friday night’s terror attacks in Paris. But it doesn’t look like we’ll see a major crash.

    Update on European opening - FTSE -45, DAX -125 CAC -111 (IG) at 7.30am

    After the terrible tragedy seen in Paris on Friday evening (and also the bombing in Beirut), markets have seen some of these fears play out in the financial world. There was noticeable buying in gold and safe-haven currencies such as the US dollar and Japanese yen. Oil also saw a bit of an increase off its two-and-a-half month lows from concern about what the Western response may mean for Middle Eastern oil production.

    Many markets opened down in Asia on the news, and futures were pointing down for European and American markets, although we did see this pull back somewhat as trade progressed throughout the day. All indications are that these negative moves would only be temporary and are likely to dissipate over the coming days.

    European equity futures -1.2% and Bunds have gapped higher at the open

    However, GS note that the attacks are likely to have a short-lived negative market impact

    GDP in Japan fell 0.2% or 0.8% in annualised times as it returns to recession and has a quadruple dip #Abenomics #QQE #BankofJapan

    Related: Asia Pacific shares fall sharply in wake of Paris attacks and Japanese recession

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