Most European stocks fell moderately in session opening

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Asian stocks and BNP Paribas

Most of the leading European stocks registered small losses after the beginning of the session, affected by Wall Street’s fall on Friday.

The Euro Stoxx index dropped by 0.3%, and Milan shed 0.3%. Paris yielded 0.64%; London 0.34%. 

The Old Continent’s stock exchanges started the day with this result after the New York stock market fell at the end of last week. The Dow Jones Industrials Index lost 0.71%, and the S&P 500 declined by 0.06%. Meanwhile, the Nasdaq advanced by 0.76%.

Besides, in Asia, Tokyo had lost 2.07% on fear of a chip shortage among automakers after a fire at one of the semiconductor producers, Renesas Electronics plants. Hong Kong fell close to 0,5%, and Shanghai advanced around 1.15%.

This occurred while the markets’ trend changed, as investors modified their bet from “cyclical” stocks. These were from banks or tourism companies, to “growth” stocks, such as technological ones.

New lockdown affects European stock markets

European markets were also affected by the establishment or expansion of containment measures in countries like France and Germany.

A new lockdown in Europe’s largest economies is putting investors on the back foot. Meanwhile, the stabilization in bond yields provides some relief against fears that heavy US spending could reignite inflation and force tighter central-bank policy. 

The 10-year US Treasury yield sank further from the highest in about 14 months amid hopes of increased demand in this week’s heavy round of sales. The offerings include a seven-year note, a maturity that prospered poorly in last month’s auction, pushing benchmark yields sharply higher.

Later today, Janet Yellen, Treasury Secretary, and the Fed chair, Jerome Powell, will speak about the coronavirus pandemic response. 

Brent oil prices dropped by 0.75% to 64.1 dollars. WTI crude dipped 1.6% to $60.58 a barrel.

Turkish assets keep dropping

Turmoil in Turkish assets continued due to the country’s central bank chief’s surprise dismissal over the weekend, with a dip in the main stock index triggering a circuit breaker. US equity futures shrank alongside most Asian stocks while the dollar recovered. The Bloomberg Dollar Spot Index increased by 0.3%.

Dwyfor Evans, State Street Global Markets’ head of Asia-Pacific macro strategy, stated that risk assets could live with higher yields during the recovery stage. We’re not there yet, so this is still really the beginning of this reflationary stage concerning the business cycle. That’s what’s pushing equities at the moment, he said.

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