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Stock exchanges prepare for rebound after their worst week since the financial crisis

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After the sharp correction experienced by world stock exchanges last week, in the hands of the coronavirus crisis and its expansion outside of mainland China, technical analysts have warned that the rebound is served. And so it has been: investors have held on to the lifeline of Chinese business confidence that, in the midst of the storm of Covid-19 and the historical lows of the industrial activity of the Asian giant, a maximum of five years. In Asia, the indexes rise and lEuropean futures leave increases of 1.5% on average.

The Ibex was as harshly punished as the rest of the European indexes, with a Fall of almost 12% weekly, to 8,723 points, while Wall Street left 15% from the recent record highs. Panic seized the parquets due to the growth of cases of those affected by Covid-19 outside of China. The virus has spread to about 60 countries around the world, but in the Asian country the number of new infections and deaths is in clear decline, with about 40 deaths in the last hours and just over 200 infected.

The outbreak has killed 2,900 people and infected at least 80,000 in China. In the rest of the world, the US has reported its second death from the disease and those affected continue to grow in South Korea, Italy, Iran and in Spain they rise to 84. But this Monday, operators have decided to ignore the health threat and get carried away by the improvement of business confidence, published on Saturday.

According to Stephen Innes, an analyst at AxiCorp, it's all due to this “pleasant surprise that keeps appetite for risk alive.” The expert assumes that there were record drops in production, new orders and employment sub-indices, while travel restrictions caused a sharp deterioration in supply chains in February. But "business confidence increased with the hope of recovery of production: Companies anticipate that this will improve over the next year after the restrictions related to the coronavirus are lifted, "explains the expert.

In addition, the Bank of Japan (BoJ) said Monday that it is closely reviewing the outbreaks of the coronavirus outbreak and, through an emergency statement, has committed to provide ample liquidity to the signs of uncertainty in the global financial markets.

This Monday, the production of industrial activity data in Europe, the United Kingdom and the US will focus the attention of investors, while Brexit will also occupy a prominent place in the minds of investors. A new round of negotiations between Brussels and London begins to define the future commercial relationship of the country with the European Union (EU) after the divorce.

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