European stocks fall on China and Ireland worries

Investors dumped stocks going into the London close on Friday after hotter than expected Chinese inflation data sparked fears that the PBC would have to start hiking rates more aggressively than first thought.

Commodity stocks bore the brunt of the sell off with the mining and metals sectors dropping in-line with bullion prices.

Bank shares also came under pressure on continued Euro-zone debt worries before staging a late recovery into the close.

Rumour and counter rumour swirled round stock markets today regarding the state of Ireland’s debt problems and if an EU rescue operation would soon get under way for the troubled country.

After hitting a fresh multi month low earlier this morning the price of the Euro took off against the Dollar as speculators citied a New York think-tank report that an €80 billion Euro-zone bailout had already been agreed for Ireland. However most asset classes soon came back under pressure after the Irish finance ministry denied the rumour.

University of Michigan sentiment index, released at 14:55 London time, rose in line with median forecasts to 69.3 for November, up from October’s reading of 67.7.

In a classic case of buying the rumour then selling the fact, the S&P traded up to session highs just before the release of the number, before selling off after the data hit the wires.
Market rumours that a whisper number of above 70 had been doing the rounds, possibly causing the brief run-up in stock prices.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.