Morgans AM: Tuesday 16 February 2021

Morgans Financial Limited

European bourses advanced in thin trade, with markets in the US, China, Hong Kong and Taiwan all closed for local holidays. The benchmark pan-European Stoxx 600 index (which includes UK equities) gained +1.32%, with Basic Resources (up +4.0%), Oil and Gas (+3.99%) and Banks (+3.1%) leading the advance. Germany's DAX gained +0.56% and France's CAC +1.45%. Vivendi SE soared +19.62% after the French conglomerate said it may spin out Universal Music Group (UMG) in Amsterdam and distribute 60% of the capital to investors by year end. Vivendi, which is controlled by billionaire Vincent Bollore, announced the plan on Saturday (13 February) after it completed the sale of a 10% stake in UMG to a consortium led by Tencent Holdings, which valued UMG at €30B. Ten-year bond yields in Germany, France and the Netherlands all rose to their highest level since September as reflation expectations gripped markets. In economic data, eurozone industrial production dropped -1.6% in December from a month earlier, worse than economists’ forecast for a -0.6% drop and a marked downturn after growth of +2.6% in November. The ZEW Economic Sentiment Index for the eurozone/Germany for February and a second estimate of eurozone gross domestic product (GDP) growth for the fourth quarter are released tonight AEST.