Most traded stocks in february 2020
The major Asian stock markets operate in Tokyo (Nikkei225), Hong Kong (Hang Seng), South Korea (KOSPI), Australia (ASX), China (Shanghai SSE180) and Singapore (Strait Times Index). There are other exchanges in Asia, but these are not given as much global importance as the ones listed above. These exchanges also contain some of the most actively traded stocks in Asia.
In Europe the FTSE 100 (UK), EuroStoxx (pan-Europe), Xetra DAX (Germany), SMI (Switzerland), CAC 40 (France) and other European exchanges operate. Moving westward, the US markets (Dow, Nasdaq and S&P 500) are considered the top three indices globally, mostly because of the market capitalisation and the sheer number of foreign companies that list in those three exchanges.
These markets are interconnected; it is not unusual to see a company listed on multiple exchanges around the world. This phenomenon has helped to broaden the markets but have also come with an unintended effect. If a stock sneezes, entire stock markets around the world catch a cold. So, a bad event in one stock or one exchange could easily and quickly be transmitted to other markets, much like a virus.
China is the centre of global trade and production, with an estimated 40 per cent of the world’s production being done in the country. Therefore, anything that is able to shut down this production hub on a large scale has the potential to affect companies all over the world with direct and indirect exposure to the situation. The most traded stocks in February 2020 are mainly those that have been exposed to the economic effects of the coronavirus outbreak.
What are the most traded stocks in February 2020?
Some of the most traded shares in February have been those directly exposed to the coronavirus situation. Some of the top traded stocks of February 2020 are also those whose core business revolves around commodities that have direct exposure to China. Commodities such as gold, crude oil, copper and palladium are having their most volatile seasons in a long while.
Some of the most trades shares in February are:
Chipmaker Nvidia is directly exposed to the coronavirus situation. As a manufacturer of graphics cards for recreational and professional gaming, it sources a lot of its components from China. The enforced quarantines have hurt the company and the CEO recently downgraded its earnings by $100 million. Currently, Nvidia stock continues to attract heavy attention in the market.
Apple, the maker of the iPhone, has several manufacturing outlets in China where its prestigious device is churned out from. The company has had to close down several plants due to the ongoing coronavirus epidemic, forcing it to issue an earnings guidance warning which rattled investors. It has been one of the most traded stocks of February 2020.
NMC Health was hit in December 2019 and early January by a report which questioned the veracity of the profit claims made by the company. However, it was the top gainer stock on the FTSE 100 for two weeks in a row this February and remains one of the most actively traded stocks in February 2020.
This company is part of the Virgin Group and provides tourist space travel. It is having a roller coaster month. After gaining heavily as one of the most traded stocks in February, it lost 18.2 per cent as some point in Thursday’s trading, although it was able to recover a lot of lost ground. Its earnings report is due on Tuesday, February 25, and a Morgan Stanley analyst has indicated that the stock is overweight and overdue for correction, with a $22 target. Will the earnings report give the markets reason to sell this stock? Tuesday will tell. The stock currently trades at $33.66.
After enduring tough times as a result of the US-China trade war, semiconductor company AMD has found itself facing headwinds from the coronavirus situation. S&P 500 rating agency recently upgraded the stock to BB status. The company paid off a sizeable chunk of its debts in 2019 and recently pulled back from its all-time highs. AMD has good trading potential. AMD was projected to have double-digit growth in 2020 after staving off the difficulties of 2019. This is now in doubt and AMD may witness significant volatility for those who wish to trade its stocks.
Electric vehicle maker Tesla has been one of February 2020’s best performers, with a share price that is surging towards $1,000. It is one company which has retained resilience despite the coronavirus outbreak. It may continue to attract more attention in the months to come.
Factors to watch in the future
A stock market analysis for 2020 shows that going forward, investors will not only focus on the immediate impact of the coronavirus outbreak, but also the long term impact. Countries and companies that have been affected by this outbreak will see a negative impact on their earnings as a result of lost production and lost revenue. Countries will be forced to release stimulus packages to revamp their economies. Some central banks may have to cut interest rates to spur economic activity. Some governments may have to organize large scale bailouts to save entire sectors from collapse.
Bloomberg has already scaled down its GDP forecast for China from 6 per cent to 4.5 per cent. More than 300 companies in China have applied for bailouts from the government, as many have lost employees and lost revenue from enforced shutdowns and quarantines. Some of the affected companies supply crucial spare parts to automakers, aircraft makers, smartphone makers, etc. Apple issued a warning that it would have to revise its earnings guidance for the second quarter of 2020 lower, and the announcement sent immediate shockwaves to Asian and US markets. This is the kind of market impact that we will see from some of the most traded stocks of February 2020.
However, the coronavirus is not all that the markets have to worry about. The Brexit trade negotiations will kick off in March, and are expected to be completed by the December 31, 2020, deadline set by the UK government to complete the transition. Therefore, we expect several stocks listed on the FTSE 100 as well as the US and Asian markets to show great volatility as the year rolls on. The outcome of the trade negotiations will determine the business status of many European companies operating in the UK, even as the free movement and work status in the EU comes to an end.