Other major European stock exchanges also lost ground during Thursday’s trading. The main index of the Paris Stock Exchange CAC 40 today fell by 2.1 percent to 4837.42 points. The DAX index of the Frankfurt Stock Exchange fell by 2.5 percent to 12,703.75 points and the index of the Milan FTSE / MIB fell even by 2.8 percent to 19,065.44 points. The London Stock Exchange also lost ground. According to the FTSE 100 index, it lost 1.7 percent to 5,832.52 points.
“Restrictions are already approaching the local closure of economies. The spread of the disease is accelerating despite this effort, so not only investors are obviously worried about what will happen next, “says Patria Finance analyst Tomáš Vlk. At the same time, the future is even less bright than during the first wave of the pandemic, as central bankers and politicians have already used most of the support tools for economies during the spring and summer.
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“The economic policy help with which the markets managed the second American wave without major problems is now lacking,” adds Vlk. The level of market concerns, measured, for example, by the European fear index in Stoxx, for example, rose from 23 to more than 27 points in Thursday alone, by almost a fifth. Investor neurosis is growing hand in hand with the form of introduced restrictions. Negative signals range from the introduction of a night curfew in major French cities and a state of emergency in the country, or to a ban on visits to London.
“All these measures mainly affect the services sector, but also indirectly the entire economy. That is why the shares react negatively, “says Pavel Ryska, an analyst at J&T Banka. Along with the pandemic threat, a split among American politicians over another spending program to support the overseas economy also hit European stock exchanges at the most inopportune moment. “The stock market expected an agreement to be reached, but this is still not being fulfilled and the chances are declining with the upcoming elections,” Ryska emphasizes. However, there is also fear of the starting results season for the third quarter, or of the failure of the developed coronavirus vaccines.
Stock bets are said to be even more uncertain in the coming weeks. “Trading will continue to be very nervous and volatile,” says Komerční banka analyst Bohumil Trampota, and as Tomáš Vlk points out, stock exchanges are not cheap. “The shares are still relatively high and the risks have increased, which in my opinion speaks more for a decline,” says Vlk. At the same time, European stock exchanges, unlike America, were far from able to shake off the first wave of the pandemic. While Wall Street was heading for a new peak, continental stock markets had stagnated in early June, about 15 percent below their pre-crisis high, where they have remained until now.
