After losing days on the stock exchange, bargain hunters take advantage of the moment and buy. They briefly helped the European stock markets to a minimal recovery. But the mood remains unstable.
Nerves fluttering on the New York Stock Exchange: traders on Monday evening.
After four trading days with severe turbulence and significant losses, the European stock exchanges stabilized on Tuesday for the time being. However, the counter-movement is minimal. This is not much more than a technical countermovement, said one trader. The environment is still characterized by great uncertainty regarding the further development of interest rates and the economy. The recovery is therefore unlikely to last. Before the announcement of the interest rate decision in the USA on Wednesday evening, investors are likely to hold back anyway. This could reduce profits again. After unexpectedly high inflation, more and more economists are expecting a rate hike of 75 and not “just” 50 basis points. One trader said there was a great danger that the central bank would stall the economy.
In Germany, the DAX was up 0.7 percent in the first few minutes of trading on Tuesday. to 13,524 points. The interest rate and economic concerns associated with persistently high inflation had cost him almost 1300 points within a week, and now there was at least a small countermovement. The courses later tipped into the red area. At 11:30 a.m., the DAX was 0.3 percent in the red.
The situation is similar in Switzerland. At 9:15 a.m., the Swiss Market Index (SMI) was up 0.24 percent. The broad SPI rose 0.21 percent. The recovery didn’t last long. By 11:30 am the SMI and SPI were down over 1 percent.
Mixed situation in Asia
In Asia, the situation was mixed. The Japanese Nikkei lost 1.3 percent. In China, the CSI 300 index of mainland China’s top 300 companies fell 0.3 percent. Hong Kong’s Hang Seng Index rose 0.2 percent. The Japanese Nikkei lost 1.3 percent.
Heavy losses in the US
The American stock exchanges fell further on Monday in the face of increasing interest rate and recession concerns. Two days before the Fed’s interest rate decision, market participants feared that the unexpectedly high inflation could persuade the monetary authorities to raise interest rates even more significantly. The shares of technology companies were once again under pressure: Their selection index Nasdaq 100 reached its lowest level since November 2020 and ultimately lost 4.60 percent to 11,288.32 points.
The market-wide S&P 500 closed after its lowest level since March 2021 with a minus of 3.88 percent at 3749.63 points. Compared to the record high in January, this also means a decline of well over 20 percent, which means that the stock market barometer signals a bear market according to the usual definition. The leading index Dow Jones Industrial lost 2.79 percent to 30,516.74 points. At times it was at its lowest level since February 2021 – the recovery in the second half of May fizzled out.