European shares followed the global stock markets lower again, Tuesday. However, analysts are attempting to calm fears by suggesting current market activity is part of a technical correction and isn’t due to any problems with Europe’s fundamental economic backdrop.
By 1235 BST, the EUROSTOXX 600 had lost 2.17%, while the EUROSTOXX 50 was 2.39% lower. The picture was equally downbeat in the regions. The German DAX fell 2.11%, the French CAC was down 2.44%, while the Spanish IBEX was 2.63% in the red.
European stocks follow US, Asia markets lower
European investors are maintaining the downbeat tone that has prevailed since the middle of last week. The US’ S&P 500 index slumped 4% Monday and the DJIA lost 4.6%, as the session was marred by volatility as investors face up to the fact US interest rates could rise more quickly than previously anticipated.
If that happens then the cheap money that’s been available since 2008 – thanks to record low interest rates – will no longer be available. This will increase the costs of borrowing, while also improving bond yield rates.
When bond yields rise, investors often prefer them as an investment, as the guaranteed rate of the return can be higher than the riskier stock market.
European stock movers
As with Monday’s session, the majority of European stocks are in the red, Tuesday.
French-based bank BNP Paribas is among them, as investors punished the financial services provider for some disappointing details in its fourth quarter earnings report. BNP Paribas shares fell 3.59% to €63.03.
Adidas shares were also in the red, losing 1.90% to hit €175.40, as the sportswear specialist agreed a branding deal with headphones maker, Zound.
Other fallers included:
- Banco Santander shares down 2.99% to €5.61.
- BMW shares lost 1.85% to €87.69.
- Vivendi shares were down 0.68% at €22.06.
There were some share risers, too, Tuesday.
Intesa Sanpaolo shares rose 1.43% to €3.13, as the Spanish bank announced a new plan to halve its debts and cut costs.
Elsewhere, shares in Apple parts provider, AMS AG, surged 11.66% to CHF97.30, after announcing strong Q4 profits.