European shares fell sharply at the start of the session on Monday as global volatility continued amid concerns of a looming US recession.
Athens Avenue is also under unprecedented pressure, with sellers maintaining the lead for the third consecutive day. Negative catalysts include disappointing data on the American economy, with the shadow of recession “covering” the markets, and the escalation of geopolitical risk in the Middle East, which maintain the strongly negative climate at the global level.
In particular, in the session on Monday (5/8) the General Index “sinks” by -5.26% and trades at 1,355.57 points, between 1,355.53 (low of the day) and 1,428.01 points (high of the day). These are the lowest levels of the last four months and the negative record of 1,357.30 points (April 16).
The next lowest prices are found in January of this year, with the risk of “wasting” the profits of 2024 in the event of a further retreat, towards 1,300 units. Sellers are rushing into banking stocks again, due to the general turmoil that characterizes the sector recently.
Global Sell-Off Continues
The continuation of the global sell-off is weighing heavily on Athens Avenue, amid growing concerns about a possible recession in the US. An additional “burden” is the chaotic situation in the Middle East, as Israel prepares for an attack by Iran and Hezbollah.
Meanwhile, in the region’s major markets, Germany’s DAX is under heavy pressure at -2.33% and 17,661 points, France’s CAC 40 is down 2.18% at 7,093 points, and London’s FTSE 100 is slipping 2.09% to 8,007 units.
A similar climate is observed in the region, with the FTSE MIB in Milan falling 1.84% to 31,371 points and the IBEX 35 losing 2.61% to 10,383 points.
The plunge in major European markets comes amid broader global volatility – U.S. stocks fell on Sunday night after a tumultuous final week for Wall Street that saw the Nasdaq Composite fall into correction territory.
Oil is down 1% at $72.8 a barrel on the NYMEX while cryptocurrencies are also under heavy pressure, with Bitcoin losing nearly 15% to $50,504 and Ethereum recording a whopping 18.5% loss.
The alarmingly weak US jobs report in July saw markets price in a nearly 70% chance the Fed will not only cut interest rates in September but cut them by 50 basis points, Reuters reports.
The technology sector is under more pressure, amid “overheating” scenarios in stocks after the rally sparked by advances in artificial intelligence.
Nikkei Erased All 2024 Gains
The global sell-off extended at the start of the week as concerns grew that the US Federal Reserve has backed down on policy support for the slowing US economy, sending investors to the safety of bonds. Japanese stocks plunged as traders anticipated more domestic interest rate hikes.
The Topix and Nikkei indices were in a bear market today. The Topix is on a three-day decline that is the worst since the 2011 Fukushima nuclear meltdown.
Both indexes are down more than 12%. Benchmarks have fallen more than 20% from their all-time highs on July 11.
The 12.4% drop for the Nikkei – which closed at 31,458.42 – marked the index’s worst day since “Black Monday” in 1987. The index’s 4,451.28 loss was also its biggest in points throughout its history.
The Nikkei also erased all of its gains so far this year, moving into a losing position for the year.
The broad-based Topix fell 12.23% to close at 2,227.15.
