© Reuters.
By Peter Nurse
Investing.com – European stock markets are opening a sharp decline on Friday, with investors cutting positions due to uncertainty surrounding the populist trade movement.
At 2:05 am ET (0705 GMT), the contract in Germany fell 0.5%, in France it fell 1% and the contract in the United Kingdom fell 0.9%.
Global equities are expected to experience their worst weekly decline in about three months, partly due to the turmoil caused by the organization of small traders in online forums, such as Reddit, to force hedge funds to reverse short positions in a series of equities . This resulted in these funds pouring out other equity holdings in order to increase liquidity.
Retail traders had their trading capacity restricted for a while on Thursday, when brokers, including the popular online broker Robinhood, cut their loans and restricted trading at some of the featured companies, such as GameStop (NYSE 🙂 and AMC Entertainment (NYSE :).
However, Robinhood has since said that some will rise on Friday, raising fears that volatility will resume as the week ends.
This raised concerns about the slow distribution of vaccines in continental Europe, a region hard hit by the Covid-19 virus, which culminated in a dispute between the European Union and drug manufacturers over the distribution of limited supplies.
There was good news on the subject, after biotechnology company Novavax (NASDAQ 🙂 said on Thursday that it was more than 89% effective in protecting against the virus in its UK phase three clinical trial.
In corporate news, Swedish telecommunications company Ericsson (BS 🙂 reported strong basic gains in the fourth quarter due to healthy sales of 5G equipment.
Remaining in the sector, Orange (PA 🙂 ended negotiations on Thursday night with Iliad (PA 🙂 when reaching a mobile sharing network in France.
The main economic data released in Europe on Friday will be the Germans for January and the country’s fourth quarter figures.
At the beginning, the French shrank much less than expected at the end of last year, dropping 1.3% in the last three months of 2020, compared to a forecast of 4% contraction.
Oil prices stabilized broadly on Friday, with traders balancing concerns about weakening demand due to Covid-related travel restrictions with Saudi Arabia’s next supply cuts, as well as declines in inventories.
Saudi Arabia, the world’s largest oil exporter, is expected to cut production by 1 million barrels a day in February and March in an attempt to balance a market hit by travel restrictions as the globe faces an increase in coronavirus cases, a battle more difficult due to the discovery of new contagious strains.
In addition, US oil last week fell the biggest drop since July, to the lowest level since March.
US oil futures traded 0.1% below $ 52.28 a barrel, while the international benchmark contract rose 0.1% to $ 55.16.
Elsewhere, it rose 0.5% to $ 1,851.20 / ounce, while it was trading 0.1% below 1.2107.