Share markets opened slightly lower on Wednesday, following a mixed trading session in Asia where stocks drifted in Tokyo but rose in Seoul after Kim Jong Un suspended its military actions against the South. Investors are tempering the enthusiasm and risk appetite they have had so far this week amid fresh spikes in coronavirus cases in hotspots such as Germany as well as the south and southwest of the US. However, current reassuring macro data from both Europe and the US tell investors stimulus measures are working well and provide further protection against any renewed downside risk that a second wave of COVID-19 might spark. Having said that, there is still a possibility that investors will reduce their exposure to the most virus-impacted sectors, such as Travel & Leisure as well as Oil & Gas on a short to mid-term view if new cases continue to pile up.
The FTSE-MIB from Milan is the only European benchmark to trade higher so far with the market holding above 19,600pts. The price continues to track within its horizontal consolidation between 19,580pts and 19,800pts with no bearish alert in sight. A clearing of the zone at 19,800pts is required to open the door of an extended rally towards 20,000pts, which is an important psychological as well as technical level.
