European Markets Crash On Hawkish ECB, Weak China Data
London: 17 January 2024 (TraderMade): European markets endured a brutal pummeling today, floored by a double whammy of unexpected blows.
At about 09:12 AM GMT, UK’s FTSE 100 (UK100) dropped 1.41% to 7452 French CAC 40 (FRA40) declined 1.02% to 7301 German DAX (GER30) also dipped 1.02% to 16380.1 IBEX 35 (ESP35) plummeted by 1.26% to 9835.949
European Markets Reeled by Two Punches
- Hawkish ECB: Rate cut hopes dashed, pushing expectations to April (maybe).
- Weak China Data: Growth falls short, and luxury brands like LVMH and Kering suffer.
- Lone Beacon: Payment company Worldline surges on shakeup plans.
- Overall Pain: European stocks plummet on risk aversion.
- Open Question: Short-term dip or lengthy market winter? Stay tuned.
Hawkish ECB
First, hawkish whispers from ECB officials dashed hopes for an imminent interest rate cut, sending investors who built castles on March expectations scrambling to rework their timelines. April might be the earliest dance music starts playing, if at all.
Weak Chinese Economic Data
Second, China's economic engine coughed and sputtered, delivering a growth rate well below the optimistic forecasts swirling in the air.
This threw cold water on risk appetite, especially for luxury brands like LVMH and Kering, whose champagne flutes clinked loudest with Chinese spending. Their share prices plummeted, reflecting the investor exodus from anything with a whiff of China dependence.
Ray Of Hope
But amidst the carnage, a lone beacon of hope flickered. Worldline's ( A renowned payment company) stock defied gravity - propelled by news of a potential strategic revamp to keep unwanted suitors at bay. This rare green shoot in the desolate landscape served as a reminder that even in the darkest market hours, opportunities can bloom.
Winding Up
Today was a day when European stocks, metaphorically speaking, were fed a bitter cocktail of hawkish rhetoric and disappointing data. The resulting hangover saw investors fleeing for the exits, with only a few exceptions, like Worldline dancing to a different tune.
