Tuesday, 22 October 2019

European stock markets join global downtrend

European stock markets join global downtrend

LONDON: Europe’s major stock markets churned lower Wednesday as investors took their cue from broadly downbeat moves on Wall Street and in Asia.

Virtual currency bitcoin meanwhile dived, with some traders eyeing sub-$10,000 after what one analyst called a “cryptocalypse” that saw digital units take a hammering.

London stocks “opened on the back foot following downward trends in the US and Asia, signalling a shift in global sentiment as traders opt to lock in profits following the latest rally,” noted Russ Mould, investment director at online stockbroker AJ Bell.

Adding to the gloom, disappointing earnings eclipsed takeover activity in the British capital.

Publisher and conference organiser Informa revealed it was in talks to buy rival UBM to create a giant worth more than £9.0 billion ($12.4 billion, 10.1 billion euros).

The deal is aimed at accelerating growth and slashing costs, the companies said in a statement. But investors were unconvinced, sending Informa shares tumbling more than nine percent.

The FTSE 100 was also punished as poor results from luxury fashion giant Burberry and publisher Pearson sent the two companies’ share prices diving by seven and five percent respectively.

‘Cryptocalypse’ for bitcoin

Bitcoin was down at $10,554.80 compared with $10,759.55 late on Tuesday, when it had slumped by around 15 percent.

The fierce selling also spread to other alternative digital units, with ethereum, ripple and litecoin all losing about a quarter of their value Tuesday.

Bitcoin is down from record highs approaching $20,000 in the week before Christmas, having rocketed 25-fold over the year before being hit by concerns about a bubble and worries about crackdowns on trading it.

“It’s been a Cryptocalypse overnight with BTC and other virtual currencies coming under heavy selling pressure,” said Greg McKenna, chief market strategist at AxiTrader.

But Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers, sounded a slightly positive note, saying:

“Not all hope is lost. The cryptocurrency market is privy to these wild swings and seasoned veterans in this space have seen this happen many times previously.

“Not saying that it couldn’t be different this time but every major correction has been followed up by a rally more powerful than the last.”

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