European stocks experienced only slight changes on Tuesday after a three-day break, as the Stoxx Europe 600 remained largely the same. Some activity was seen, however; HSBC Holdings shares saw a 5% increase due to the large profit surge in Q1, whereas BP shares slipped by 5%, despite exceeding earnings expectations. Additionally, UK builders have gone up after reports have shown that the UK government may be bringing back its home-buying subsidy program. On Tuesday the Stoxx Europe rounded off to 389.32, which was just around 0.2% higher than Thursday, when it closed at 22.44 points.
Additionally, energy and oil has not been left unaffected by the European market. BP reported their results on Tuesday, which led to a drop in BP shares by 5.1%. BP’s drop has contributed to a 1% decline in the STOXX Europe 600 Oil & Gas sector index, which may be due to the pressure they have received from sliding crude prices. This concern over prices arose as more countries ease their anti-virus lockdowns, which has caused the price of crude and London prices to decrease by 4%. The trading sector in Europe also saw HSBC shares go up by 5.2%, bumping up the banking index by 2%. Although the stock increase may be due to the less than expected rise in bad debt provisions, there have been shares increasing across the board, from French banks such as BNP Paribas at 3.75% and Societe Generale at 5%. The final outcome of HSBC’s profit is presumed to be earnings of 0.0%, which will be a decrease from 2019 when it reported earnings worth of £47.04 on sales of £3,586.00.
The aftermath of the restrictive lockdowns has impacted a lot, and the housing market has been hit hard by constraints in properties during this time. However, the government’s consideration to bring back the home-buying subsidy program has caused activity in the industry, such as UK builder Persimmon. The home-buying subsidy, alongside the impressive rebound from the Bank of England, has caused a 6% increase in Persimmon shares. Though being the highest share increase, other builders have also seen growth; Taylor Wimpey has risen by 4% and Barratt Developments have gone up by 4.2%. This industry’s decline can be seen when there is a closer focus on sales, and in the final quarter the homebuilding industry saw a 21% decrease in people looking to buy homes.
When it comes to purchasing homes after the lockdown, calculations by mortgage lender Nationwide showed that the demand for the average house was around £207,171, and though there has been a 0.1% increase from previous figures, last years annual growth rate was 3.3% for a house price, a significant increase to the 1.5% we see now.
There is still a level of uncertainty as many factors can impact the European market. Although there has been reasonable normalization after Eurozone countries have relaxed their restrictions, there is still countries such as Italy, Spain, Britain and France experiencing above-average indexes. The market is also changing to factors outside the pandemic, though; the outbreak of new tariff disputes arriving after the U.S. Treasury put heavy punishments on companies that created products from piracy, such as steel industries, has led to heavy fluctuation in the market in relation to steelmakers. The political landscape has changed too; with Brexit closing, upcoming events such as the European Union’s summit meeting to discuss China’s partnership with Europe will impact the stock exchange greatly. Overall though, the pandemic has impacted people’s spending habits, which have resonated across the market. The economic downtick caused by the virus may continue even after the pandemic has been controlled, as people may continue acquiring the well-worn habit of saving money. COVID-19’s capacity to bring the world’s business to a halt has impacted and has the potential to change the market forever.
