On Tuesday, a slew of European shares went through a withering wave of sell-off pressure, mostly led by the losses of the cyclicals such as financials and energies, as investors’ sentiments remained mixed ahead of Wednesday’s US Federal Reserve Policy meeting.
On top of that, adding further strains to the bloc’s lenders and financial services providers, the eurozone banks’ index .SX7E soured 3.8 per cent after an EU financial stability watchdog had been quoted saying that the bloc’s lenders should be disabled to pay off dividend payments at least until end-2020, however, the bloc’s banking stocks had still been hovering above 40% from their all-time lows.
Besides, Monday’s rally of the European stocks had been foundered by a plunge in crude oil futures’ prices as well over worries of potential supply glut, while the oil supermajors such as Royal Dutch Shell, BP alongside Total were tottered between 3 per cent and 4.5 per cent.
Oil and financials drag European shares down ahead of FOMC meet
In point of fact, amid a mixed sentiment among the market participants over Wednesday’s Fed policy meet, financials’ and oil stocks had pared yesterday’s gains as beforementioned, while the regional pan-European STOXX 600 shed 1.2 per cent with major Eurozone markets such as Frankfurt, London and Paris winding down the day sharply lower.
Citing statistics, on Tuesday’s European market wrap-up, London’s FTSE 100 faltered 2.11 per cent to 6,335.72, Frankfurt’s DAX dwindled 1.57 per cent to 12,617.99, while the French CAC 40 had curbed out 1.55 per cent to 5,095.11.
Elsewhere in the Europe, Madrid’s benchmark IBEX 35 had rounded off the day 1.82 per cent lower to 7,752.30, while Italy’s FTSE MIB had curtained off the day just a notch shy of 1.5 per cent to 19,930.20. Meanwhile, referring to a hesitant investors’ sentiment ahead of the Fed policy meet, an analyst at Tavira Securities, Keith Temperton said, “Some of the moves were pretty crazy yesterday and we are keeping back a little.
Maybe a bit concerned pre-Fed. My feeling is the Fed is not going to say or do anything. They’re probably going to reserve the next round of ammunition for potential damage from a second wave or if more lockdown is required. ”