Stock indices of developed countries continue to be under severe pressure because of increasing concerns about the risks of the global economic downturn.
The beginning of February 2016 is marked by the strengthening of pessimistic moods among investors and market participants. After a noticeable decrease of the stock indexes in the U.S. and Europe in January markets remains pronounced negative dynamics. Many indices dropped to their minimum over the past few years.
Sunday, February 8, on most stock exchanges of the USA and the EU saw a decline of indexes in the range from 2% to 4%. In Germany the DAX 30 fell by 3.3% to 8 979 points – the lowest value since 2014
The serious losses suffered banking sector securities: shares of two largest German banks, Deutsche Bank and Commerzbank, fell by 10.2% and 8.6%, respectively. A number of experts with grim humor noted that while maintaining such dynamics Germany will soon ask for financial help from Greece:
Other European indexes also suffered serious losses. Britain’s FTSE 100 ended the day on 8 February, a decline of 2.7% to mark 5 689 points (the minimum level since the beginning of 2013) French CAC 40 fell by 3.2% to the level 4 066 points. Indices IBEX 35 and FTSE MIB in Italy and Spain fell by 4.4% and 4.6% to mark 8 122 441 and 16 points respectively.
The composite index of the largest companies in the EU Stoxx Europe 600 lost by the end of the trading session Monday 3.5 percent, declined to the level of 314 points, its lowest level since 2014
At stock exchanges of the USA also experienced a drop in prices. During the session major indices down 2-3%, but by the end of trading were able to recover some of the losses they suffered. The Dow Jones Industrial Average closed lower by 1.1% at level 16 027 points. S&P 500 lost 1.4 percent, having fallen to a mark 1 853 points. The NASDAQ fell 1.8% to level 4 of 284 points.
Shares of US financial sector was also under severe pressure, quotes Goldman Sachs and Morgan Stanley on the new York stock exchange (NYSE) fell by 4.6% and 6.9%, respectively. Shares of Bank of America-Merrill Lynch fell by 5.2%, the decline at Citigroup was 5.1%, JP Morgan 2.1 per cent.
Experts note that negative sentiment is largely due to concerns about the increasing risks of deflation and recession in the global economy. In its client note, the chief strategist at Morgan Stanley, the stock markets of the EU Seker Graham (Graham Secker) pointed out the predominance of “bearish” sentiment in the markets:
“Quite difficult to remember when the mood among investors were as bearish as at the moment. In a sense, the situation in 2008 was worse, the global financial crisis and fears about the possibility of a global depression has created a panic in the markets. However, among the players are also seeing very strong risk aversion. Recently one of our clients asked us to note any reasons for optimism from the bulls. We had to confess that we cannot answer this question because recently have not met anyone who would maintain optimism about the future dynamics of the stock market”.
In comments to the Agency “Bloomberg” investment Director of Prime Partners françois Savary said:”Investors cannot make a definitive assessment of what is happening in the global economy. The risks of deflation and recession intensify. In this situation, does not help even the fact that the price levels for the many companies already seriously decreased when not-so-bad earnings. Among the investors is dominated by negative sentiments, and in General there remains a strong uncertainty. It’s scary”.
According to some estimates, the volume of losses in global stock markets from-for falling of quotations at the beginning of the year exceeded $6 trillion:
