STOXX-50 index is being led down by financials and energy shares
European markets pared some of yesterday’s gains as market sentiment remains under pressure from a blurry short to mid-term outlook for stocks. Today’s appetite for riskier assets has been dented after traders saw poor industrial production figures from China, sending benchmarks slightly lower everywhere in the Eurozone. Overall market sentiment remains fragile this week as investors struggle to assess the inflation and monetary situation, especially after the collapse of SVB sparked fears of a systemic risk due to higher borrowing costs.
The STOXX-50 index is being led down by financials and energy shares, with most sectors also trading in red territory, as a corrective move following yesterday’s surge.
The situation isn’t reassuring from a technical point of view as the market has broken-out of its bullish trendline and failed to go back above the 4,200.0pts mark yesterday. The situation may become even more dangerous If prices continue to drop and break the 4,070.0pts level (23.6% Fibonacci ratio) as this would open the door to a deeper correction towards 3,910.0pts (38.2%) and 3,780.0pts (50%).
Pierre Veyret– Technical analyst, ActivTrades
SX5E
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