European equity markets plunged today, due to the absence of risk appetite, while the lack of major macroeconomic data from the US and Eurozone weighed further on market sentiment. The CAC, DAX, IBEX and the London equity benchmark index retreated sharply between 0.66% and 1.9%.
It seems there is a late reaction in the markets following the fairly tepid US employment report on Friday. Investors have been prompted into some profit-taking to lock in any recent gains, while the US dollar has reversed and started to weaken further in today’s trading session with the USD index trading around 80.2.
On the macroeconomic front, the fairly robust German industrial output data failed to provide any support to the DAX index. In addition, the Eurozone’s sentiment index was fairly in line with expectations at 14.1.
In London, financial stocks weighed heavily on the index today. Lloyds, Barclays and RBS retreated sharply between 2% and 2.7%, while insurance companies also posted heavy losses. Resolution, Prudential, Aviva and Old Mutual fell more than 1.3%.
Tomorrow, the release of the UK industrial and manufacturing output data could add further momentum to the London equity market. However, investors might remain cautious, trying to digest the recent mixed economic data from the US and risk appetite remains limited.