After recording some painful losses on Monday, European stocks continued to lead the downward index on Tuesday. Speaking about his performance that day, IG Chief Market Analyst Chris Beaushan commented:
“As the session began, a small overnight recovery in stock futures has returned rapidly. So far, there are no signs of a wider reversal across the stock market.”
As trading closed on Tuesday, CAC went down at its biggest margin, dropping 1.77% to 4,730 points. The DAX fell 0.93%, following 12,063 points as it led the collapse on Monday with a drop of more than 3%.
Early on that day, the FTSE escaped the fate of its eurozone counterparts. This bouncing off over 7% in the morning thanks to impressive profits from HSBC (LON:HSBA) stocks.
“It includes London’s losses again. This time it was helped by bounces on HSBC stocks, but again, the positive impact is limited as HSBC focuses on Asia, which is less readable to UK banks like Lloyd’s and Natwest,” added Beauchamp.
Certainly, at this early rally, it wasn’t enough to see the FTSE that ended up falling 1.09%, ending at 5,729 points when the final bell rang from 5,803 at lunchtime.
Aside from concerns about the second wave and lockdown, European stocks fell to a month’s lowest level, with a 0.8% drop in index, if not the dramatic Dow Jones Open, for companies with European stocks listing losses of over 3%.
Speaking about the potential second wave scenario and its impact on equities, Chris Tinker, co-founder of Libra Investment Services, said: The worst-case scenario of the event (the election results in some form of uncertainty and conflict extension of community-related hospitalizations and deaths, and undoubtedly uncertainty and conflict extended, are quantified by the Apollo measure of safety margins.
“That level is 31% below the current price, but that level (2365) is actually at the market index premium at the lowest stage in March, rising along the market valuation trend. If even the worst-case scenario is unlikely to create a new low that year, the fact that the “best-case” scenario, which rises above here, is 20% to 45% higher, will certainly raise interest if better results emerge. ”
