04 september 2020
09:06
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European investors are keeping a cool head after the sharp dip of the US tech exchange Nasdaq.
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However, the European stock markets, which saw solid gains turned into losses yesterday, are keeping their cool on Friday. The Euro Stoxx50
, the eurozone’s basket of star stocks, are down 0.8 percent. In Brussels, the Bel20 is looking
against a 0.6 percent loss.
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On Thursday, several stock market favorites fell from their pied-de-stable as investors took massive profits on popular tech stocks. The unapproachable tech exchange Nasdaq lost more than 5 percent, and thus had its worst day since March. About 780 billion dollars in stock market value was wiped out in one day.
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Apple
became 160 billion dollars lighter in one fell swoop. Also Zoom
was shelved after an unprecedented rally in which the video conferencing service increased sixfold since January. In addition, Nvidia
, Tesla
at Microsoft
a solid reality check with losses of up to 9 percent.
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The decline is relative: Nasdaq’s circle of high-flyers, ‘FANG +’, is still up 74 percent since New Year (see graph).
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“After the dizzying stock market climb on the back of mega caps, a cooling off is no surprise,” said Quincy Krosby, Prudential’s chief strategist. ‘This is an over-bought market that blows off steam’.
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“This battle between sellers and buyers will be fought in the coming days,” says Philippe Gijsels, chief strategist of BNP Paribas Fortis. ‘It may well be that there will be a sharper correction, whereby tech stocks can drop 10 percent. This is not surprising after the sharp price rises in recent months. ‘
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The fuse to the powder keg already came on Wednesday. When it turned out that Tesla top man Elon Musk is working under the radar on a capital increase of 5 billion dollars and is therefore taking advantage of the sharply increased price to sell shares. An additional trigger that made investors doubt the high valuations came from the Scottish corner. Tesla’s largest ‘external’ shareholder, Scottish asset manager Baillie Gifford, brought its stake in the electric car maker sharply back.
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Investors are fleeing to safety. The gold price is increasing to $ 1,938 an ounce. The euro is weakening slightly against the dollar. The oil price is also falling.
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