Research Market strategy
By Swissquote Analysts
Published on 03.03.2021
Morning news

Rio Tinto Chairman to Step Down Over Destruction of Ancient Caves

Topic of the day

Rio Tinto PLC said its chairman would step down because of its destruction of two ancient rock shelters in Australia last year, bowing to demands from some investors for greater accountability for the incident. Rio Tinto said Simon Thompson won't seek reelection next year, tying the decision to the May demolition of the Juukan Gorge shelters that contained a trove of artifacts indicating they had been occupied by humans more than 46,000 years ago. He will become the fourth senior leader to leave the world's second-largest mining company because of the incident, after Jean-Sébastien Jacques was removed as chief executive and two other executives were forced out. "I am ultimately accountable for the failings that led to this tragic event," Mr. Thompson said. The destruction of the Juukan Gorge caves illustrates how environmental and cultural issues have taken center stage in an industry that is fighting to change investors' perceptions that mining is problematic.

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Swiss stocks

The SMI continued its recovery Tuesday, closing up 1 percent on 10,817 points after hitting 10,856 points during the day, with only two stocks lower. Alongside the bond market easing, hopes the US Senate could pass the USD 1.9 trillion stimulus package as early as this week buoyed the SMI. Cyclical stocks ABB, Sika and Lafargeholcim rose by between 1.2 percent and 3.1 percent. Swiss Life rose 1.6 percent on releasing financials, with stable growth in H2 2020 business operations, an unexpectedly high dividend and a positive 2021 outlook. Credit Suisse (CS) Group slumped 2.6 percent. Traders noted the CS asset management arm Monday had banned investors from investing in or selling the Greensill fund, saying part of the fund was of uncertain valuation. Lindt & Sprüngli surged 3.3 percent. Despite failing to meet FY 2020 profit expectations, traders said margin and cash flow were good and Lindt had announced a CHF 750 million share buyback programme and a dividend increase to CHF 1,100.

International markets


European stocks closed mostly higher as relatively subdued bond-yield movements reassure investors, though Chinese warnings about potential bubbles limit gains. The Stoxx Europe 600 and DAX both advance 0.2%, the FTSE 100 is up 0.4% and the CAC-40 rises 0.3%. The price of a barrel of Brent crude increases 0.3% to $63.88. Shares in Kion Group AG rose on Tuesday after the German forklift maker said it would raise its dividend despite a decline in 2020 net profit. The company proposed a dividend of 41 European cents ($0.49) a share compared with 4 European cents previously. Net profit for 2020 fell to 210.9 million euros ($254.1 million) from EUR444.8 million, in part due to the impact of the coronavirus pandemic, though the global focus on e-commerce led to gains in the supply-chain business, the company said. Profit was also hit by expenses of EUR45.8 million for personnel measures, Kion said. HelloFresh SE sales and earnings soared in the fourth quarter, capping a strong year for the German meal-kit maker, whose products met with strong demand as the coronavirus pandemic forced consumers to spend more time cooking at home. Adjusted earnings before interest, taxes, depreciation and amortization more than quadrupled in the final quarter of last year, reaching 173.8 million euros ($209.4 million) from EUR38.6 million a year earlier, it said. Revenue rose to EUR1.11 billion from EUR511.8 million.

United States

U.S. stocks dropped, halting Monday's blockbuster rally as investors continued to grapple with volatility in both shares and bonds. The S&P 500 settled 0.8% lower, pulling back after it surged 2.4% Monday to log its best day since June. The broad benchmark index was weighed down, in part, by a continued decline in technology stocks, which also sent the Nasdaq Composite tumbling 1.7%. The Dow Jones Industrial Average lost about 0.5% after swinging between gains and losses throughout the day. Investors say their focus is squarely on central bank officials for cues on how monetary policy may shift down the road. That will determine their appetite for government bonds and for inflation-adjusted returns. A flood of easy money by the Federal Reserve since the pandemic hit last spring has helped subdue returns on bonds and fueled a rally in stock markets for much of the past year. Shares gain nearly 10% in after-hours trading after Zoom details the year of pandemic-influenced gains that made it a household name for users and investors – adjusted earnings grew by almost 10x, while adding $2 billion in revenue Zoom Video Communications Inc.'s rip-roaring ride resumed its meteoric trajectory Monday, with shares jumping as the company detailed the results of becoming a lifeline for those stuck at home due to the COVID-19 pandemic: Booming profit and revenue. The video-communications company reported fourth-quarter net income of $260.4 million, or 87 cents a share, compared with net income of $15.3 million in the year-ago quarter. Shares of Twitter Inc. (TWTR) pulled back 1.0% in premarket trading Tuesday, putting them on track to snap a three-day win streak, after the social media company announced the pricing of its $1.25 billion convertible debt offering. The company said the convertible notes, which will mature in March 2026, will not pay interest.


Despite negative guidance from the USA - especially again for technology stocks - share prices in East Asia and Australia are on the rise in midweek. The Shanghai and Hong Kong stock exchanges lead the way during trading with gains of up to 1.8 per cent. Tokyo lags a little behind with a gain of 0.4 per cent to 29,534 points. Among the big winners in Hong Kong are casino stocks such as Sands China (+6.0 per cent) and Galaxy Entertainment (+6.4 per cent).


The yield on the 10-year U.S. Treasury slipped to 1.40% after one senior Fed official suggested the central bank was closely eyeing last week's bond-market volatility.


IR rises the Bauer target to 12,10 (11,60) EUR – Hold
UBS rises the Essilor-Luxottica target to 133 (121) EUR – Neutral
IR lowers the Astrazeneca target to 7.400 (8.500) p – Hold

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