The European Stoxx 600 dove earlier this week, plummeting from 475.83 on Friday to 472.43 on Monday. After a series of peaks and troughs over the following few days, it rose on unsteady legs to 474.17 on Wednesday afternoon, before dipping again to 473.91.
According to the latest data, the index has been growing steadily for the last year, albeit with a notable dip in October to 341.76. Despite minor vacillations since then, most notably in mid-July, the index has been on a fairly steady upwards trajectory. Earlier in the week, Reuters reported that on reaching 472.95 points, the Stoxx 600 had then hit an all-time high.
The unsteadiness of the markets has been felt outside of Europe, too, with the latest economic data from China showing ‘slower-than-expected’ growth. As reported on CNBC, consumers in the world’s second-largest economy cut back on big-ticket items. Retail sales in July had been forecast to rise 11.5%, but the reality was that they were closer to 8.5%.
Despite the uncertainty around the globe, some assessments of the European situation were bullish. Writing for Reuters, Sruthi Shankar and Shreyashi Sanyal said: “The benchmark STOXX 600 has inched up to fresh peaks this month as stronger-than-expected earnings, particularly from economically sensitive sectors, such as energy and financials, made investors optimistic that European equities, which have long underperformed its US peers, have more room to run.
As a result of the buoyant numbers, Goldman Sachs adjusted its 12-month target for the Stoxx 600 from 480 points to 520. The bank also lifted its FTSE 100 target from 7,600 points to 7,900 points.
However, wrote Shankar and Sanyal, “Still, investors were concerned about a stuttering economic recovery in Asia and United States due to a rapid rise in coronavirus cases and early withdrawal of an asset purchase programme by the US Federal Reserve.”