There is no calm on the stock markets. The crash in installments continues on Thursday. The European stock exchanges are losing more than 2 percent again, and the sell-off is also continuing in the USA.
Nervous traders on the New York Stock Exchange on Wednesday.
The price slide on the stock exchanges continues. After the nervousness had subsided for two days, prices in the USA fell far into the red on Wednesday, and the sell-off continued on Thursday. On both days, the tech giants’ stocks dragged the entire market lower.
The tech-heavy Nasdaq 100 is down 0.83 percent in early trade on Thursday, down from more than 3 percent by the close on Wednesday. It fell below the 12,000 point mark for the first time since November 2020. Since the beginning of the year, the index has lost around 27 percent. The leading index Dow Jones Industrial fell by almost one percent on Wednesday and by a further 0.57 percent on Thursday. At 31,652 points, it was at its lowest level since March 2021. Since the beginning of the year, the setback has widened to around 13 percent. The market-wide S&P 500 fell 0.54 percent to 3914 points on Thursday.
In the Dow, tech stocks such as Apple, Microsoft and Intel came under pressure again. Apple shares fell to their lowest level since mid-October last year. They had been replaced the day before by the Saudi Arabian oil company Saudi Aramco as the most valuable company in the world.
“The sell signals are working on the US stock exchanges,” says Raiffeisen Switzerland’s market analysis. The markets are unsettled above all by the high inflation. Although inflation in the US fell somewhat in April, it was not as pronounced as had been hoped. The interest rate speculation fueled by this is mainly affecting technology stocks.
European markets also affected
The sell-off mood in the USA also infects the European markets. Germany’s leading index, the DAX, fell 2.2 percent in early trading on Thursday. The pan-European Euro Stoxx 50 lost 2.5 percent. In view of the mixture of economic risks and fears of interest rate increases, the DAX is not able to liberate itself, writes Landesbank Helaba in its market report. The daily losers include the Siemens group, whose shares lost more than 6 percent. Because of the war in Ukraine, Siemens is completely withdrawing from the Russian market. The decision has financial consequences.
The Swiss stock market also fell significantly in early trading on Thursday. “The hopes of investors that the price spiral would slowly come to a standstill have not been fulfilled,” comments one trader. Ultimately, US inflation has not fallen so far to stop the sell-off on the markets, adds another stockbroker.
The Swiss heavyweight index SMI lost more than 2 percent after a few minutes of trading. The sharpest decline was for the luxury goods group Richemont (-4.0%). Swiss tech stocks like AMS Osram, Logitech, Temenos, VAT, Inficon and Comet are also coming under pressure, all falling more than 2 percent.
Skeptical investors in Asia
In Asia, investors were just as skeptical. The 225-stock Nikkei Index fell 1.8 percent. The broader Topix index was down 1.2 percent at the close.
The situation in China was different: on the Chinese mainland, prices initially rose surprisingly, but later they were unable to escape the downward pull. The Shanghai Composite lost 0.12 percent. The Hang Seng in Hong Kong came under heavy pressure, down 2.24 percent at the close.
Dramatic situation for cryptocurrencies
The downward slide in the crypto market is dramatic. On Thursday, many digital currencies had to accept significant price losses again. The original cryptocurrency Bitcoin fell to $26,591 on the Bitfinex trading platform, its lowest level since the end of 2020. In just one month, Bitcoin has lost a third of its value. Since the beginning of the year it has been a good 40 percent.
Ether, the second-largest digital stock after Bitcoin, fell well below the $2,000 mark. Ether has lost about half of its value year-to-date. The market value of all around 19,400 crypto assets is currently around $1.1 trillion. The record value of almost $3 trillion reached in November last year is a long way off.
Experts attribute the bad mood among market participants to two reasons: On the one hand, the prospect of rising key interest rates in many places is causing skepticism on the crypto market. Digital investments do not generate current income, interest-bearing investments such as fixed-income securities are becoming more popular. The second reason is turbulence in a well-known cryptocurrency called TerraUSD or UST. This is a so-called “stable coin”, which is intended to be distinguished from other digital values by its particularly stable value. TerraUSD wants to achieve this through a special algorithm designed to keep the cryptocurrency in a stable relationship to the US dollar. In the past few days, however, the UST exchange rate has detached itself from its peg to the dollar and has come under considerable pressure.
With agency material.