European Stocks Tumble as Wall Street Fell into Correction
European stocks plunged sharply on Tuesday as losses from Wall Street are weighing on investor’s sentiments. The tech-heavy Nasdaq index plunged more than 4% on Tuesday with the largest single-day losses from big stocks like Apple, Amazon, and Facebook. Shares of Tesla plunged at a double-digit rate on Tuesday.
The pan-European Stoxx 600 dropped more than 1%. The losses are driven by a 2% decline from the tech sector while major bourses also fell into negative territory.
European stocks have started the day with gains as markets received support from Asia-Pacific. However, European indices lost the upside momentum in afternoon trading as shares fell sharply on the bearish trend in Wall Street.
“European equity markets are deep in the red this afternoon as the continued weakness in U.S. markets and the rise in tensions between the Trump administration and China has hurt confidence,” said David Madden, market analyst at CMC Markets UK. “The weakness that we saw in big US tech names last week, is still in play, and that is driving sentiment over here.”
Airline companies were among the biggest losers on Tuesday. Shares of EasyJet dropped 6% after the company said quarantine restrictions to seven Greek Islands could result in a deep drop in its planned flight schedule.
Losses from the energy sector also added to the Tuesday selloff. Oil price settled at the lowest level since June as investors have been showing concerns over lower than expected oil demand. US oil is hovering around $36 a barrel while Brent oil is trading below the $40 level for the first time in more than two months.
What Does it Mean for Investors?
- The futures are in red amid traders profit taking strategies.
- Nasdaq fell into correction and market analysts expect more losses ahead.
- The dollar looks steady, but gold fell sharply.