The global sell-off continued on stocks on Friday as market sentiment keeps on being weighed down by the latest developments on the struggle against the deadly coronavirus. Despite the number of cases slowing down in China, the surge of outbreaks on all continents has clearly impacted investors’ risk appetite this week, causing one of the biggest selloffs since the 2008 financial crisis. Strong volatility spikes combined with the massive bearish moves on most benchmarks (-2000pts on the DAX-30 since last week) suggest market participants are in a “panic mode” selling everything at almost any price.
Photo by Himesh Kumar Behera.
Stock traders, particularly energy shares investors, also must factor in rising geopolitical tensions in the Middle East after Russia reportedly killed 33 Turkish soldiers in a bombing in northern Syria. However, as the current sell-off remains mostly driven by fears over the economic impact of the virus, a sharp trend reversal could take place if the situation were to improve, even slightly, or if nations and central banks were to propose solid financial plans to sustain growth everywhere.
In the meantime, health care and materials are the most impacted sectors of the Stoxx-50 Index with companies like Fresenius and Sanofi among the top movers. The DAX-30 Index remains the most impacted eurozone index of with the market now trading well below 12,000pts (see attached chart). A slight bullish correction may take place today as bear traders may want to take some profits ahead of the weekend which could send prices back to 12,000pts today. However, a fall through the 11,750 zone could extend the current bearish move to 11,450pts-11,500pts.
While a student, Pierre Veyret had a passion for the financial markets. At the time, he studied International Trade through the setting up of import / export operations and it was the techniques of hedging against exchange rate risks that helped him to make the link with the financial markets, and all especially that of Forex. It is therefore with the aim of anticipating the price of currencies several months in advance that Pierre quickly turned to different methods of analysis by drawing inspiration and surrounding himself with experts in the field. Shortly after, Pierre decided to specialize in Technical Analysis, a discipline he had the opportunity to practice with real market professionals, thanks to AFATE / IFTA, an association of which he has been an active member for several years. Pierre Veyret is passionate about the field of the financial industry with a particular interest in the various techniques of stock market forecasting. Currently, Pierre is based in the City of London where he works as Chief Analyst. He performs regular interventions on a multitude of asset classes through various media (television, internet and print media).
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© 2019 High Leverage FX - All Rights Reserved.