European stocks collapsed on Thursday as they felt the pressure of a wild day on Wall Street in which large funds took positions off the table so they were not burned by a group of retail investors punishing short sellers.
Down 1.2% on Wednesday, the Stoxx Europe 600 SXXP,
Traded 1% lower. Microchip equipment manufacturer ASML Holding ASML,
part of the Nasdaq-100, dropped in the Amsterdam trade, and drug company Roche ROG,
fell into action in Zurich.
US Equity Futures YM00,
NQ00,
pointed to opening dips again on Thursday, though not as steep as the 633-point dive for the Dow Jones Industrial Average DJIA,
on Wednesday. US markets also absorbed cautious comments from social media giant Facebook and worse-than-expected results from electric vehicle manufacturer Tesla.
The background to the losses in the markets is the remarkable gains for a group of stocks against which many hedge funds have bet.
“There was no apparent catalyst behind the stock’s decline, but the chatter in the market suggests this may be due to hedge funds short positions in GameStop and other meme stocks taking long positions in other stocks to cover their losses, after the frenzy in the first group The delay in the rollout of COVID vaccinations in Europe and the US may also have depressed 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 an active premarket trading for GameStop GME,
AMC Entertainment AMC,
and BlackBerry BB,
again on Thursday.
Nokia NOKIA,
ENOUGH,
the only European company to be defended on the Reddit WallStreetBets forum, in part due to its dual US listing, fell 2% lower in Helsinki, after an increase of 14% in the previous session. The telecom equipment manufacturer released a statement on Wednesday that it had no material explanation for the sudden increase in its stock.
Alcoholic beverage conglomerate Diageo DGE,
DEO,
Up 4%, helped by a 1% increase in organic sales in the fiscal first half. Diageo also increased its interim dividend by 2%, saying it expects a sequential improvement in the second half.
Shares of insurer Prudential PRU,
PUK,
2378,
7% as it said it weighs in stock offerings of between $ 2.5 billion to $ 3 billion to take advantage of Asian growth opportunities, while also saying it would split its Jackson National branch in the US into a New York Stock Exchange- Publicly traded company. Prudential previously considered an IPO of Jackson National.