Markets come back from Wednesday’s drop | Calamatta Cuschieri

Global markets staged a come-back from Wednesday’s fall and Wirecard files for insolvency

US markets surged higher on Thursday, reversing a chunk of Wednesday’s drop as stocks got a boost from a major update of the banking sector from the Federal Reserve. The Dow Jones Industrial Average climbed 299.66 points, or 1.2 percent, to 25,745.60 with the S&P 500 gaining 33.43 points, or 1.1 percent, to 3,083.76. The Nasdaq Composite Index advanced 107.84 points, or 1.1 percent, to end the session at 10,017.

European markets reversed their earlier losses and also closed higher after a choppy session, showing the nervousness around coronavirus and lingering trade tensions. The pan-European Stoxx 600 Index rose 0.7 percent with the autos and financials sectors leading the gains. The German Dax also saw a 0.7 percent rise on the back of gains from Daimler, Volkswagen and BMW.

 Maltese markets also climbed on the back of thin trading, with the MSE Equity Total Return Index closing up 0.212 percent at 8,321.98 points. Only two companies registered changes, with International Hotel Investments Plc gaining 1.71 to €0.595 and GO Plc rising 0.61 percent to €3.32.

Wirecared files for insolvency

Wirecard collapsed on Thursday owing creditors almost $4 billion after disclosing a gaping hole in its books that its auditor Ernst & Young said was the result of a sophisticated global fraud. EY said while it was completing the 2019 audit, it was provided with false confirmations with regard to escrow accounts and reported them to the relevant authorities.

The payments company filed for insolvency at a Munich court saying that, with 1.3 billion euros ($1.5 billion) of loans due within a week its survival as a going concern was “not assured”. The financial technology company is the first member of Germany’s prestigious DAX stock index to go bust, barely two years after winning a spot among the country’s top 30 listed companies with a market valuation of $28 billion.

Wirecard’s implosion came just seven days after EY, its auditor for more than a decade, refused to sign off on the 2019 accounts, forcing out Chief Executive Markus Braun and leading it to admit that $2.1 billion of its cash probably didn’t exist.
 

This article was issued by Peter Petrov, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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