European shares volatile following sharp falls for US tech stocks

European stocks were volatile on Wednesday, following a Wall Street crash session in which the technology-heavy Nasdaq Composite Index fell the biggest in one day since September 2020.

The regional Stoxx 600 stock index lost nearly 1 percent in early trades before recovering and trading up 0.4 percent. Exporters have strengthened following the decline in the euro Five-year low Against the dollar of below $ 1.06 in bets on aggressive interest rate hikes in the US.

The German DAX rose 0.1% and the London FTSE 100 added 0.5%. The index of car manufacturers in Europe rose by 2%.

The index of expected volatility of major European stocks rose to a level of 33, well above the long-term average of about 20, when traders found it difficult to assess the economic outlook against the background of weak market sentiment. .

The chairman of the US Federal Reserve, Jay Powell, has signaled that the central bank is facing a line of Interest rate hikes Fight rising consumer prices. But strict social restrictions in China, stemming from the country’s zero-cube policy, have shaken investors’ inflation forecasts.

“Markets are trying to sort out the economic consequences of extradition in China,” said Jargali Mioros, a member of the investment committee at Carmignac, noting the risk of a supply chain of bundling and exacerbating inflationary pressures from Russia’s invasion of Ukraine, which has intensified. The fuel and food. Prices.

But after the Chinese authorities allowed the country’s carefully controlled currency to weaken – the renminbi fell 3.4 percent against the dollar this month – it will also lower the cost of importing goods from the global workshop, which “could be deflationary,” Miros said.

The moves in Europe came after a 3.95% drop in NASDAQ on Tuesday. Google’s parent alphabet reported a $ 1.5 billion drop in quarterly earnings following the closing bell, Quotes The slowdown in European advertising spending in its YouTube division is preventing Russia from invading Ukraine.

Ahead of this profit season, when Apple and Amazon have yet to report results, some investors have hoped that the dominance of large technology groups will secure their money and relatively high stock valuations against the economic pressures of war and the rising inflationary impact on household money. .

“This sector specializes in perfection and is doomed to failure,” said Julian Howard, a leading investment manager for multi-asset solutions at GAM Fund Manager. “Anything that is really short is really good [earnings] The market is about to be severely punished. ”

European stocks were also bolstered by futures trading hinting that Wall Street would recoup some losses from the previous session. Contracts that follow the S&P 500 stock index, which closed down 2.8% on Tuesday, added 0.9%. Those who bet on the top 100 stocks on NASDAQ rose 0.9%.

In Asia, Taiwan’s heaviest Taiex stock index fell 2.1% before recovery and added 0.2%. Kospi from South Korea fell 1.1% after Apple supplier LG Display reported its quarterly operating profit fell 93% compared to the same period last year, due to a slowdown in consumer demand for laptops and smartphones.

Government bond markets were mostly swept away, with yields on the 10-year U.S. Treasury bill remaining at 2.77% following a shelling of a shopper purchase earlier this week.

Brent crude, the international oil index, stood at $ 105 a barrel.

European shares volatile following sharp falls for US tech stocks Source link European shares volatile following sharp falls for US tech stocks

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