All European stock markets fell quite sharply on Monday 24 January. Paris, Frankfurt and Milan lost around 4%. For once, the pandemic is not in question.
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Delta and Omicron are no longer popular on the financial markets. Investors have their eyes on global geopolitics and US monetary policy. On the geopolitical side, it is the Ukrainian file that worries. The Russian-American tensions, and the announcement Monday January 24 by NATO of the dispatch of ships and combat planes to reinforce its defenses in Eastern Europe only accentuated the fears. Fears that add to the other news of the week: today’s meeting of the US Federal Reserve. Investors fear that the FED will announce an interest rate hike to fight inflation, which would increase the cost of credit and debt repayment.
Despite appearances, this Monday was a day almost like any other on the stock exchanges. Above all, let’s not talk about a crash but about a downward correction. Sounds of boots in Ukraine, prospects for interest rate hikes in the United States and serious decline in sector stocks such as shares in Ehpad, retirement homes and care homes for dependent people. The Korian title fell 14%, driven by the fall of Orpea (-16%) whose management is pinned in a book to be published on Wednesday January 26. A combination of factors that pushes shareholders to sell their shares while the level of the stock markets is very high at the moment.
As the famous saying goes in the financial markets: “In the stock market, the trees never climb to the sky”. When the markets are high, investors always find good reasons to withdraw their balls, which lowers the stock market, as was the case on Monday. A day that foreshadows a period of instability in the coming days and weeks.