European Shares

Stocks slid slightly lower in Europe on Tuesday, following the trend spotted overnight in Asia, while US futures were mixed.

Investors are driving markets lower today, seizing the occasion given by lingering global and local worries to take some profit after a two-day rally. Traders are monitoring updates on the corporate front to assess the nature, depth, and length of the expected coming recession, and if the current rebound in equities can be extended in the short term.

The situation is different in Europe as worries about the energy crisis keep weighing market sentiment down. Investors are struggling to get a clear long-term vision for stocks, torn between the impact of a Russian gas cut on growth, and lingering questions about what will be the ECB’s next move. That said, miners and tech shares are among the worst performers today while utility stocks, such as EDF (+49% in 6 days), have prevented benchmarks from dipping lower.

In addition to corporate news – with today’s report brought by Alstom and PepsiCo – market operators will also pay close attention to macro data with this morning’s EU CPI print as well as a speech from BoE Governor Bailey and the US Building permits data due later this afternoon. Today’s current bearish price action is seen as a normal market correction so far, and the STOXX-50 index is likely to continue rising towards 3,522.0pts/ 3,545.0pts if the current very short-term support level over 3,475.0pts keeps being defended by bull traders.

Pierre Veyret– Technical analyst, ActivTrades

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