At close, the pan-European Stoxx 600 was down 0.87% at 373.44, alongside a 0.51% dip for the German Dax to 13,104.25 while the FTSE Mibtel was off 0.60% at 20,598.78
Stock markets across the region slumped as tensions between China and the US flared up again and as the euro added to its recent breakout.
On Wednesday morning, Washington gave Beijing three days to shut its consulate in Houston – the country’s fourth largest city – “to protect American intellectual property and Americans’ private information.”
Geopolitical concerns in markets came on top of simmering concerns regarding the need for sustained policy support for the economy given the possibility of a drawn out economic downturn.
By the end of the day, the pan-European Stoxx 600 was down 0.87% at 373.44, alongside a 0.51% dip for the German Dax to 13,104.25 while the FTSE Mibtel was off 0.60% at 20,598.78.
Travel&Leisure stocks were hit hardest, with the Stoxx 600 sub-index down 1.65% alongside a 1.26% drop for the Autos&Parts sector.
Euro/dollar meanwhile was again flying in the background, climbing 0.44% to 1.1578, as the US dollar spot index fell towards technical support at its 52-week lows.
The move came alongside big gains in silver and gold futures, as investors sought ought safe havens, with the former surging by nearly 7% to $22.96/oz.
Front month Brent crude oil futures on the other hand were down 0.32% at $44.18 a barrel on the ICE – despite the retreat in the Greenback.
No major economic releases were scheduled for Wednesday with investors waiting on the latest quarterly results from Microsoft and Tesla which were due out after the close of trading in New York.
We still have to watch the risk of increasing stress during the second, more drawn out phase of the ongoing tick-shaped recovery, Kallum Pickering at Berenberg said in a research note sent to clients.
Pickering said, even if the virus remains under control and major economies avoid renewed national lockdowns, nervous businesses and households may continue to maintain high precautionary cash balances instead of spending with confidence.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.