EUROPEAN SHARES
Markets drifted lower in Europe on Wednesday, alongside Asian shares and US futures contracts, as investors digested uncertainties from multiple sources.
The prospect of a US dovish monetary switch faded further yesterday after retail sales data topped estimations in the region. This continues to significantly affect market sentiment towards riskier assets.
Investors were disappointed with the latest slew of mixed economic data from China overnight. While GDP figures seemed to display a reassuring picture of the Chinese economy, industrial production and retail sales data fell short of expectations, sparking worries that the economic fabric may still be weaker than it looks.
Meanwhile, lingering geopolitical tensions in the Middle East remain as one of the uncertainty leverages for stocks, especially after Russia moved a supersonic-missile-carrying warship into the region.
With all that in mind, it is no surprise to see appetite for risk under significant pressure, especially as most benchmarks were already flirting with record highs.
However, the sell-off could be tempered this week as the earnings season continues to roll, and investors may be tempted to use the current pull-back as a “buy the dip” opportunity if corporate results demonstrate that companies are coping well with the current uncertain environment.
All eyes will be on the French luxury sector, with LVMH’s Q1 results to be published today. The CAC-40 currently trades below the 7,450pts mark following a bearish opening under the strong 7,475 level.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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