Panic sales continue in Europe, Prague is experiencing the worst decline since March 2020. The exception is commodity titles
European stock markets are opening up another deep slump as investors continue to panic. The fact that this is a panic is evidenced by the development of the main indices, which at one point lose up to 5%. The DAX index, which is losing over 3.5%, is the fifth move of more than 3% in the last eight days.
Today, investors’ fears are directed primarily at commodities, where frantic growth continues across the spectrum. The price of oil is rising by more than 6% and the price of Brent oil has even briefly touched 130 USD / barrel. In a period of high inflation and fears of rapid rate hikes, this commodity shock is an extremely unwelcome factor that will have to be grasped not only by central banks, but above all by the entire world economy.
#Daybreak: The Russian oil shock sent #Brent to $ 140 a barrel #Petroleum – https://t.co/T9EESlCjOw pic.twitter.com/zjrFBEA0B9
– Patria.cz (@PatriaCZ) March 7, 2022
As we have almost become accustomed to in recent days, panic sales are most affected by bank stocks, which are still bottoming out. The Stoxx 600 Banks European Bank Index is depreciating around 5%, and carmakers are weakening at a similar pace. Today, resilience is proven by technological titles, which are not falling as sharply as most of the market, but the clear winners are commodity producers. The Stoxx 600 Oil & Gas producer index is growing by 3.5% and the Stoxx 600 Basic Resources producer index is growing by 2%. On the one hand, commodity producers are helped by rising prices for their production, but also by speculation that Russian supply outages are opening up space for other competitors.
Unfortunately, the Prague Stock Exchange does not avoid panic either, where the PX index is losing as much as 6%. We last saw such deep declines in Prague in mid-March 2020. The actions of Komerční banka and Erste Bank, which are falling by more than 12%, also engulfed hysteria.