European stocks plummeted on Thursday, feeling the pressure of a wild day on Wall Street, when large funds took positions from the table so they wouldn’t be burned by a bunch of retail investors punishing short sellers.
With a 1.2% drop on Wednesday, Stoxx Europe 600 SXXP,
traded 1% lower. ASML Holding ASML, manufacturer of microchip equipment,
a component of the Nasdaq-100, discarded in the Amsterdam trade, and the pharmaceutical company Roche ROG,
fell into Zurich action.
US stock futures YM00,
NQ00,
were aiming for opening declines again on Thursday, although not as sharp as the 633-point free fall for the Dow Jones Industrial Average DJIA,
on Wednesday. US markets were also absorbing cautious comments from social media giant Facebook and worse-than-expected results from electric vehicle maker Tesla.
The backdrop for losses in the markets is the notable gains for a group of stocks against which many hedge funds have bet.
“There was no clear catalyst behind the stock dip, but market talk suggests it may have been due to hedge funds with short positions on GameStop and other meme stocks closing long positions in other stocks to cover their losses after the frantic high in the first group. The slowdown in the launch of COVID vaccines in Europe and the USA may also have influenced market sentiment. In addition, Wall Street accelerated its fall after the FOMC [Federal Open Market Committee] decision, ”said Charalambos Pissouros, senior market analyst at JFD Group.
There was already active pre-market trade for GameStop GME,
AMC Entertainment AMC,
and BlackBerry BB,
again on Thursday.
Nokia NOKIA,
NOK,
the only European company that is champion on the Reddit WallStreetBets forum, partly due to its double listing in the United States, fell 2% in Helsinki, after a 14% increase in the previous session. The telecommunications equipment maker issued a statement on Wednesday saying it had no material explanation for the sudden increase in its shares.
Diageo DGE alcoholic beverage conglomerate,
OF THE,
increased by 4%, helped by reporting a 1% increase in organic sales during the first fiscal semester. Diageo also increased its provisional dividend by 2% and said it expects a sequential improvement in the second half.
Shares of the insurance company Prudential PRU,
PUK,
2378,
fell 7% as it said it was weighing between $ 2.5 billion and $ 3 billion to take advantage of Asian growth opportunities, while also saying it would split its Jackson National arm in the US on a stock exchange. New York listed company values. Prudential was previously evaluating a Jackson National initial public offering.