European Stocks Recover After Friday Tech Selloff
European stocks are largely in green on Monday as improving economic data helped in building investor’s sentiments. The stock markets around the world saw a massive tech sector selloff in the past few consecutive trading sessions. European stocks closed lower on Friday as the technology sector plunged more than 2%.
On Wall Street, mega tech stocks including Apple, Amazon, Netflix, and Alphabet reported the worst day since March. US stock indices plunged from an all-time high that they had hit at the beginning of the last week.
However, the positive economic data has enhanced investor’s sentiments. U.S. Labor Department reported that nonfarm payrolls grew by 1.37 million last month compared to analysts’ expectations for the 1.32 million growth. The unemployment rate also plunged to 8.4% last month, thanks to improving business activities and easing social distancing policies.
The services sector data also highlights strong economic activity and hints that the global economies are steadily moving towards the pre-pandemic levels. The Eurozone services purchasing manager index came in at the 50 levels, while U.K. services data also grew sharply in August from the past month.
Asian stocks and US futures are in green on Monday despite trade war concerns. The shares of Semiconductor Manufacturing International Corporation (SMIC), which is China’s largest chip manufacturer, dropped at a double-digit rate as US Defense Department said the Trump administration plans to impose restrictions on the Chinese company.
Semiconductor Manufacturing International Corporation is the biggest Chinese player that is working on expanding domestic semiconductor production. The latest trade restriction by the White House could provoke a new trade war between the world’s largest economies.
What Does it Mean for Investors?
- Stock markets are likely to extend the volatile moves.
- Gold is steady at around $1935 per ounce.
- US crude oil fell below $40 level.
- Euro continues trading around $1.18 level against the US dollar.