LONDON (AFP): European stock markets slid Wednesday as investors awaited key company earnings and economic growth data in the United States.
Traders “are waiting for some direction from across the Atlantic as US earnings season gets into full swing and key economic announcements loom at the end of the week”, said AJ Bell investment director Russ Mould. Investors will later track the latest results from electric carmaker Tesla, headed by Twitter owner and billionaire Elon Musk.
That follows this week’s earnings gloom from US corporate titans Microsoft and Johnson & Johnson.
“Traders are keen to see how Musk’s primary business performed over the period,” added Tickmill analyst James Harte. Markets will then absorb fourth-quarter economic growth data for the world’s biggest economy on Thursday.
Asian equities fluctuated as traders in several countries returned from the Lunar New Year break with recession fears still causing concern.
While markets have enjoyed a strong start to the year as a slowdown in inflation gives central banks room to temper their interest rate hikes, focus is now turning to the economic impact of last year’s increases.
Worries about the growth outlook, and the impact of higher rates on company profits, are also offsetting optimism over China’s reopening from years of zero-Covid measures.
Data showing a slight improvement in US factory and services activity was unable to settle nerves, with figures still showing the sectors in contraction.
Focus is also turning to next week’s Federal Reserve policy meeting, with speculation growing that it will lift rates by 25 basis points.
Oil firmed as traders weighed the prospects of recession against the outlook for demand from China as it emerges from its zero-Covid policy.
Hong Kong, Shanghai and Taipei remained closed for the Lunar New Year holiday.