European markets react to data earnings tech-led sell-off in the U.S.

European stocks are expected to open lower Wednesday as investors react to the technology-led rout in the U.S. that is putting pressure on financial markets around the world.

London’s FTSE is seen opening 32 points lower at 5,898, Germany’s DAX down 38 points at 12,930, France’s CAC 40 down 12 points at 4,962 and Italy’s FTSE MIB 42 points lower at 19,338, according to IG.

European markets look set to follow their counterparts in Asia lower Wednesday as investors react to declines on Wall Street. The Nasdaq Composite dropped 4.1% to close at 10,847.69 Tuesday, meaning the tech-heavy index was down 10% over the past three days. The Dow Jones Industrial Average plunged 632.42 points, or 2.3%, to end its trading day at 27,500.89. The S&P 500 slid 2.8% to close at 3,331.84.

Shares of Japanese conglomerate Softbank Group fell more than 3% in Asia overnight. The stock has plunged more than 10% since its Friday close after a Financial Times report identified the firm as the “Nasdaq whale” that bought billions of dollars in technology company stock options over the past month.  

Chinese inflation data for August released Wednesday showed the producer price index declined 2.0% in August from a year earlier, according to China’s National Bureau of Statistics, in line with expectations for a 2.0% fall in a Reuters poll. The consumer price index in August rose 2.4% as compared with a year ago, also in line with expectations of analysts in a Reuters poll.

Oil markets remain in focus for investors too after crude prices plunged overnight, hitting lows not seen since June, amid renewed demand concerns due to rising coronavirus infection rates across the U.S. and Europe.  

AstraZeneca shares will be watched Wednesday after the stock plunged in extended trading Tuesday after the company said a late-stage trial of its Covid-19 vaccine candidate has been put on hold due to safety concerns.

On the data front in Europe, Russia releases adjusted second-quarter gross domestic product (GDP) data and Switzerland releases its unemployment figures for August. Mulberry Group releases full year preliminary results on Wednesday.

– staff contributed to this market report.

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