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Original title:[European Stock Express]A sell-off is coming! Under the haze of the epidemic, European stocks plunged and the panic index rose sharply, ready for more shocks
FX168 Financial Report (London) News on Wednesday (October 28), European stock markets fell for the third day in a row and the pan-European 600 index hit a five-month low. Investors expressed concern about new measures taken by European governments to limit the epidemic to the economy. I am concerned about the negative impact.
As of this release (6:27 pm Beijing time), the UK FTSE 100 Index, the German DAX Index and the French CAC Index are down 1.29%, 2.61% and 2.35%, respectively. . The pan-European 600 index fell 1.71%, reaching its lowest level since May.
The UK’s FTSE 100 index fell to a six-month low. On Tuesday, the chairman of the UK Vaccine Task Force said the first-generation vaccine “may not be perfect.” Previous studies have found that the immunity of people infected in the summer in the UK is declining rapidly.
Both German Chancellor Merkel and French President Macron will announce new restrictions on Wednesday to curb the second increasingly severe wave of the new corona epidemic.
Data released by the British government this week showed that the number of new coronary pneumonia infections, the number of hospitalizations and the growing number of deaths are increasing.
“In Western Europe, the growth of confirmed cases is accelerating and continues to deteriorate. The proportion of patients who tested positive and the proportion of hospitalizations has also increased in several countries,” Goldman Sachs wrote in a report sent to clients Tuesday by the night.
The latest implementation of restrictions has put pressure on the economic outlook that has been affected by the epidemic in the spring and summer. A strategist at Italian bank UniCredit said this “seriously affected market sentiment.”
Allianz’s chief economic adviser, Mohamed El-Erian, tweeted on the same day that Europe is paying the price for not doing more to stop the new coronavirus outbreak.
In European stock markets, bank stocks led the decline, including Deutsche Bank and HSBC, which had significantly increased their performance the day before due to a performance that exceeded expectations, and both fell significantly. Additionally, the pan-European travel equity index fell 3% for the day, and energy stocks also fell along with crude oil prices. Brent crude oil fell more than 3% for the day, falling below $ 40 a barrel, reflecting renewed market concerns about demand for crude.
The US stock market is under pressure simultaneously and the futures market shows that today it will open significantly lower. The Dow Jones, S&P and Nasdaq index futures fell 1.58%, 1.28% and 1.05%, respectively.
As the panic spread, the prices of US and German government bonds rose moderately, indicating that investors are flocking to safe havens. The yield on 10-year US Treasuries fell from approximately 0.02% to 0.76%, and the yield on German 10-year Treasuries fell from 0.026% to 0 , 63%. The dollar index rose, peaking at 93.41. Although gold has safe-haven properties, it is under pressure from the rising US dollar and has found undifferentiated selling by investors seeking liquidity. It has fallen below $ 1,900 and is near $ 1,897.60 an ounce.
Investors also predict that the upcoming US elections next week will also have a huge impact on the stock market. Known as the Panic Index, the VIX index broke 36 on Wednesday, well above the long-term average of 20. During the day, the VIX index rose 11.71% to 36.23, typically more than 30 represents market panic.
Credit Suisse’s investment department said: “Due to the uncertainty of the November 3 US election and the timing of the introduction of the US stimulus bill, coupled with the growing impact of the new corona epidemic in Western countries on economic recovery, the investment environment has entered a period of increased volatility. “
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