Market Analysis

Dark clouds over European markets, stocks trading significantly lower

Stock markets traded significantly lower at the start of this new week, with solid drifts registered from shares in Shanghai to US Futures, as investors digest a worsening economic outlook. Market operators’ “risk-off” trading stance, started before the war by rising living costs and the prospect of tighter monetary policies, is now also being fed by surging energy prices and expectations of a much slower economic growth this year. Value and growth stocks are unsurprisingly registering the worst performances so far, as investors seek safety and hedging solutions with other assets such as Treasuries, industrial metals (copper, aluminium), grains and energy commodities. Sharp price actions have been registered on both Brent and Crude oil in early trading, boosted by the current military conflict in Ukraine, which naturally pushed energy and mining shares among the top performers on Monday, while most other sectors are now set for a technical bear market following the +20% drop since their last tops. With no major economic news expected, traders are likely to face a more “technical” market today, unless some significant breakthrough in diplomatic talks during the current ceasefire in Ukraine comes and shake market sentiment.

Source: ActivTrader


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