The major European stock indices are closing sharply lower. The major indices could not dodge the bullet that the US indices are seemingly getting through despite the fact that the focus of the banking crisis is a centered in the US.
However, these types of things always have the potential to spread. Moreover the European stock indices have been outperforming into 2023. If the issues over the last week are part of the lag effect from what has happened with monetary policy globally, that may have a negative impact on growth/earnings. In short sell what is expensive. The European stock indices being higher this year (with some making new all-time highs), they are the most expensive.
Looking at the closing levels:
- German DAX fell -3.04%
- France’s CAC fell -2.90%
- UK’s FTSE 100 fell -2.58%
- Spain’s Ibex fell -3.51%
- Italy’s FTSE MIB fell -3.8%
Looking at France’s CAC, it reached an all-time high last Monday, March 6 at 7401.15. That high took out the 2022 high price of 7384.86. The price did move lower after the failed break, but the momentum was much stronger today.
Technically, the price fell below the 38.2% retracement of the move up from the December 21 low at 7014.31. However it still remains comfortably above the 50% midpoint at 6894.69 and the rising 100 day moving average at 6833.32 (blue line in the chart below).
For the year, the France’s CAC is still up 8.31% on the year despite today’s sharp declines of nearly 3%.
In comparison, the S&P index is currently trading marginally higher on the year. It closed 2022 at 3839.85. The current prices at 3869 – up 0.7%. The index traded in negative territory earlier today.
Last week the
- German DAX reached its highest level since February 2022. The German DAX is still up 7.44% on the year
- On February 17, the UK FTSE 100 reached its new all-time high. The index is still up 1.3% this year despite the -2.58% fall today
- Spain’s Ibex reaches highest level since February 2020, and is still up 8.87% on the year
- Italy’s FTSE MIB is up around 10.47% for the year, after getting within 0.6% of its all-time high earlier this month on March 6.