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On 3 February, shortly after the European Central Bank announced it would not raise rates yet, the Europe-wide Stoxx 600 equities index dipped 0.5 percent below its recent narrow trading range, what traders call a “flatline.”
Tech stocks pushed the market down, losing 1.8 percent, while telecom stocks rose 0.7 percent.
Prices slumped partly on news that the Eurozone’s growth pace slowed in January.
The purchasing managers index fell to 52.3 in January, losing a full point from December’s 53.3 mark.
Ratings above 50 signal growth; the higher the number, the more rapidly the economy is growing.
TREND FORECAST: The market is reacting to the threat of higher interest rates. As rate hikes come closer, markets will continue to move down.
Despite ECB president Christine Lagarde’s recent refusal to restate clearly that Europe’s central bank will not raise rates this year, the continent’s stock market will continue to wobble downward as expectations grow that ECB will push rates higher to fight inflation.