Europe’s main stock index fell to its lowest level in three months on Tuesday, as rising geopolitical tensions following Russia’s warning over a nuclear doctrine update pushed investors to trade stocks for safe havens.
The STOXX 600 index lost early gains and fell 1.01% to 497.74 points, heading for a third consecutive day of losses, with safe assets, such as gold and the dollar, back in rise.
The Kremlin has said the aim of the updated nuclear doctrine is to make potential enemies understand the inevitability of Russian retaliation in the event of an attack.
“I don’t think this will have any impact on the (European) economy or profits. It’s just a natural reaction whenever the word nuclear is mentioned by a head of state,” said Patrick Armstrong, chief investment officer at Plurimi Wealth.
“Obviously, this causes investors to worry about potential downsides, just as a stock investment is motivated by the hope of an upside. So I don’t think it’s anything but rhetoric, and the market will get over it.”
The automotive and financial sectors fell more than 2% each, making them the hardest-hit sectors in the overall market decline.
President-elect Donald Trump’s upcoming nominations for Treasury secretary and U.S. trade representative are also in focus following last week’s picks for healthcare and defense positions.
Investors are starting to question the effect of Trump’s inflationary policies, such as possible tax cuts, while also awaiting Nvidia’s results on Wednesday.
. IN LONDON the Financial Times index fell by 0.50%, to 8,068 points.
. IN FRANKFURT the DAX index fell by 1.25% to 18,950 points.
. IN PARIS, the CAC-40 index lost 1.34%, to 7,180 points.
. IN MILAN the Ftse/Mib index collapses by 2.23%, to 33,006 points.
. In MADRID, the Ibex-35 index recorded a decline of 1.47%, to 1,502 points.
. In LISBON the PSI20 index fell by 0.88%, to 6,357 points.
Source: Terra
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