EU stocks drifted lower following overnight bearish trend in Asia
Stocks drifted lower in Europe for the last trading session of the week, following the overnight bearish trend in Asia, led by the tech sector. Market sentiment is under pressure today after investors received a batch of disappointing news on the corporate front. Even if Snap Inc. may have sparked this decreased appetite for stocks after reporting poor results, market sentiment remains weighed down by the general state of the sector as many tech firms are slowing down on hiring. In Europe, investors must deal with a much more uncertain environment. Yesterday’s surprising move from the ECB which entered its monetary tightening cycle proceeding with a higher-than-expected 50bp rate hike while unveiling its new “Transmission Protection Instrument” (bond buying programme), was received by investors with a degree of scepticism. Meanwhile, the current political crisis in Italy following prime minister Mario Draghi’s resignation after the two key parties withdrew their support to the Government, is also adding uncertainty. However, despite today’s bearish price action, equity markets remain on their way to close their best week in a month, while investors try to assess whether this will turn out to be a temporary relief or a real trend reversal.
Meanwhile, market operators will be waiting for earning reports from American Express and tech giant Twitter, due later today.
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