European shares hit 6-month low as sell-off deepens, volatility
Milan: European shares fell to their lowest level since August 2017 on Tuesday as a global sell-off in equities deepened and volatility spiked on growing worries over inflation and rising bond yields.
All sectoral indexes were trading in negative territory, pushing the pan-European STOXX 600 index down for the seventh straight session.
The index was down 2.6 percent by 0814 GMT, while Britain’s FTSE dropped 2.5 percent and Germany’s DAX fell 2.7 percent. The euro STOXX volatility index hit its highest level since April 2017.
“Price action is clearly driven by technical factors, tied to a brutal awakening of stock volatility,” said Alessandro Balsotti, head of asset management at JCI Capital Ltd. “We are undoubtedly in uncharted waters.”
Investors fear a comeback of inflation would prompt central banks to tighten monetary policies faster than expected, scaling back from years of stimulus that boosted stock valuations and lifted European equities to 2 year highs in January.
Among the top fallers on Tuesday were Ocado, down 7.1 percent, after the British online supermarket missed forecasts with flat full-year core earnings, while Babcock declined 4 percent after lowering its revenue forecasts.
Among the few stocks in positive territory, Intesa Sanpaolo was up 0.4 percent after Italy’s biggest retail bank pledged to halve its soured loans and grow revenue strongly while cutting costs under a new four-year plan. Traders said the market welcomed Intesa’s dividend plans.
AMS jumped 7.9 percent after the chipmaker reported a surge in fourth-quarter profit as the Austria-based group benefited from rising demand for the sensors it makes for smartphone producers such as Apple.
Euro zone consumer confidence was unchanged in July from June, indicating economic growth may be stabilizing going into the third quarter, figures released on Monday showed.
U.S. home sales fell for a third straight month in June as a persistent shortage of properties on the market pushed up house prices to a record high, likely sidelining some potential buyers.
The Russia Russian central bank is seen holding the key rate at 7.25 percent on Friday after it indicated last month the government’s proposal to increase value added tax has all but dashed prospects for further cuts in the coming months.
Signs that the Bank of Japan (BoJ) might scale back its monetary stimulus faster than expected sent tremors through bond markets on Monday, while European stocks and U.S. futures slipped as threats of further U.S. tariffs on China drained risk appetite.
A bill for quick prosecution in cheque bounce cases and provide compensation to the complainant was passed by the Lok Sabha today.
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