after, after Three sessions of heavy dropsEuropean stock exchanges looked to rebound in Tuesday’s session. However, the uncertainty was not long in coming: in the middle of the session, European stock markets turned around and started trading lower, only to deepen the declines at the end of the day. The Ibex 35 declined the session with a 1.37% drop and lost 8,100 points. Frankfurt and Paris each fell about 1%. Milan and London, for their part, adjusted their losses, closing down 0.31% and 0.27%, respectively.
Tension at extreme levels: In the face of the growing fear of accelerating inflation and monetary tightening by central banks, investors have become nervous, and in recent days have reduced their risk positions. These churches are showing that stock market operators aren’t lowering their guard: The Federal Reserve (Fed) meeting wraps up on Wednesday and will reveal the determination of the next price hike, and from there, the short-term moves of the indices.
Within Spanish selectivity, CaixaBank and Repsol breakouts fell, closing with a rise above 1%. For their part, Pharma Mar and Cellex, the worst affected, recorded losses of 10% and 6%, respectively. The small gains European stock markets made at the opening on Tuesday are not enough to cover the crashes they have suffered so far. So far this year, Italy’s Ftse MIB has fallen by about 19%, Germany’s Dax and France’s Cac are 15%, while Britain’s Ibex and Ftse have managed to reduce their declines to 5% and 2%, respectively.
According to analysts at Link Securities, many investors are convinced that central banks will have to raise interest rates to They managed to control the price hike Even if the cost is to cause a recession. Indeed, after poor data on US inflation published last Friday (+8.6%), the possibility that the Fed will choose to raise rates by 75 basis points – above half a percentage point the market was discounting – is gaining traction. “The scenario of a soft landing for the major advanced economies, where central banks were able to rein in inflation without punishing excessive economic growth, appears to be ruled out for the time being by some investors who see recession entry from the major advanced economies as inevitable.” , noted Juan Jose Fernandez Figueres, director of the analysis house.
On the other side of the Atlantic, Wall Street opened with a timid rise in the Dow and S&P 500, after sharp declines in previous sessions. This latest indicator, the most representative of the US economy, entered the bear market on Monday, after losing more than 20% since the last peak reached on January 3. The Asian market continues on a negative tone: Japan’s Nikkei closed this Tuesday with a collapse of 1.32% and the Hang Seng index of 0.32%.
The Fed action It will be the stock market’s compass for the upcoming sessions: Experts agree that if Wednesday is less severe than expected, there could be gathering of indicators. In addition, the lifting of restrictions in China due to the epidemic and the first signs that inflation has peaked will affect the behavior of financial markets in the medium term.
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US 10-year Treasury yields reached their highest level since 2011 on Monday, and the Spanish risk premium declined slightly and settled at 134 basis points from 135 in the previous session. In the same way, the Italian and the Portuguese fell and occupy 244 and 134 points, respectively.
Like the stock market, the cryptocurrency sector is facing a time of crisis. Bitcoin continues to lose support: it accumulated a loss of 28% in one week and reached new lows since 2020. Crypto asset trading and lending platform, Celsius Network, Decided to suspend all withdrawals, exchanges and transfers between accounts as a result of harsh market conditions. The decision dealt a huge blow to investor sentiment, and according to analysts, the fear is that other platforms will adopt the same practice.
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