(ABM FN) After a positive start to the trading day, the Brussels stock exchange had to give up all profits again on Wednesday. Interest-sensitive real estate shares in particular had a difficult time.
The Bel20 closed 0.2 percent lower at 3,883.83 points.
The downward movement came after interest rates rose in Europe. The German ten-year interest rate today rose 8 basis points to 2.58 percent. “We have recently reduced our positions in equities and have become more cautious,” Philippe Gijsels, market strategist at BNP Paribas Fortis, said in an interview with ABM Financial News.
“The market is pricing in a Goldilocks scenario and is currently very insensitive to the interest rate increase,” says Gijsels. “The stock market is holding up well, while interest rates have risen in recent weeks, but there is a limit to how long that can last,” the strategist said.
Gijsels also sees several other risks that could push the market lower. “Nobody wants a conflict in the Middle East, but the risks are real. Iran’s previous attack on Israel was carefully telephoned to avoid creating an escalation, but the asymmetric risk remains, with the oil price being able to rise or fall by $20 depending on how the coming weeks evolve,” said Gijsels.
“We will also notice it with the upcoming company results, but we see that the semiconductors and the leaders on the stock exchange are currently doing less well. We are moving into May and that is often a slightly weaker period on the stock market,” the strategist warned. “We are therefore erring on the side of caution and taking some money off the table without going negative, possibly building up some additional exposure to the market after the summer or later.”
“We remain very positive on commodities such as copper, gold and silver, as we believe the bull market in commodities has only just begun. Central banks continue to buy gold, while private individuals are still selling en masse. Once that momentum reverses, it could give new impetus to the market. Although we do expect that after the recent rally we will now see a temporary stabilization,” Gijsels ended his argument.
Confidence among Belgian entrepreneurs fell in April, after two months of increases.
New orders for durable goods in the US rose as expected in March. Orders were 2.6 percent higher last month than a month earlier. Economists had also expected an increase of 2.6 percent.
The euro/dollar traded lower at 1.0685. The price for a barrel of WTI oil fell to $82.70 per barrel. Last week, crude oil inventories fell by 6.4 million barrels to 453.6 million barrels in the US.
Risers and fallers
Interest-sensitive shares in particular suffered on Wednesday, but the most striking was the price gain of Melexis. The chip baker gained more than 17.2 percent after publication of the quarterly figures. According to Kepler Cheuvreux, Melexis did not disappoint. It seemed especially positive that the CEO said that the inventory corrections are behind us.
Index heavyweights Argenx and AB InBev rose 0.2 and 0.4 percent and Solvay gained 0.7 percent after a price target increase by Degroof Petercam.
Cofinimmo and WDP fell 2.1 and 2.9 percent and were therefore at the bottom of the table.
In the BelMid, Barco rose 2.5 percent, recovering somewhat from Tuesday’s price fall. KBC Securities, Kepler Cheuvreux and ING today lowered their price targets for the share.
Aperam gained 1.9 percent, while Shurgard lost 2.7 percent and Proximus went into the red due to its ex-dividend listing. Adjusted for this, the share rose 2.4 percent.
Among the small caps, Texaf gained 2.7 percent, but Agfa-Gevaert fell 2.5 percent.
Wall Street
When the European stock markets closed, the main American indexes were cautiously in the red.
Source: ABM Financial News
ABM Financial News is a supplier of stock market news, video and data, both for real-time trading platforms and dealing rooms and for online and offline media publications. The information in this article is not intended as professional investment advice or as a recommendation to make certain investments.
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