BRUSSELS, June 19 — European shares gained ground today, ahead of the European Council’s meeting to negotiate the EU recovery fund, while German payments firm Wirecard tumbled for a second straight day after disclosing a US$2.1 billion (RM8.9 billion) hole in cash balances.
The pan-European STOXX 600 index, which like other global markets has struggled in the face of new bouts of coronavirus infections in the China and a number of other economies, rose 0.7 per cent.
The European Council will have its first meeting to discuss a commission’s proposal to raise €750 billion (RM3.5 trillion) worth of debt to top up spending from joint coffers to be worth €1.1 trillion in 2021-27.
“Considering that the proposal requires unanimous consent, the political wrangling has been intense and is delaying some much-needed stimulus for the ailing EU economy, which is facing its worst recession since World War 2,” said Han Tan, market analyst at FXTM.
Analysts, however, say it is unlikely that there will be any quick agreement despite German Chancellor Angela Merkel’s plea for European countries to show more solidarity with each other.
“But a show of solidarity, even if the EU leaders were to make all the right noises over the coming weeks about the fund’s eventual approval, may restore some bullish momentum,” Tan said.
The STOXX 600 index is set to end the week higher today, recovering about 36 per cent from its March lows on massive stimulus and less-than-dire economic data.
However, Covid-19 cases continued to rise as around 400 workers at a slaughterhouse in northern Germany tested positive for the virus on Thursday, while the numbers rose in several US states and Beijing.
Wirecard lost another 44 per cent, after plunging about 60 per cent yesterday, as it said it may be the victim of “fraud of considerable proportions” and suspended management board member Jan Marsalek.
Lufthansa rose 2.4 per cent after its biggest shareholder, German billionaire Heinz Hermann Thiele, reached out to Berlin politicians for talks, newspaper Handelsblatt reported, the latest step in a standoff over the airline’s €9 billion bailout.
Shares in Softewareone slipped 5.7 per cent after the company announced changes in shareholder structure and in the board of directors.
The defensive utilities index rose 1.1 per cent, the most among European sub-indexes, while oil & gas stocks bounced on higher crude prices.
Stock markets in Finland and Sweden were closed for trading today. — Reuters
