After a week marked by spectacular falls, markets around the world staged a slight recovery on Tuesday, or at least a lull, spurred on by hopes of a de-escalation in trade tensions. However, despite this rebound, the future remains highly uncertain, and investors remain cautious in the face of persistent market instability.
A slight rebound after a historic fall in Europe
After three days of severe declines, Europe’s main stock markets rallied on Tuesday morning, but the recovery remains fragile. Paris’s CAC 40 index opened up 1.5% in early trading, while Frankfurt’s DAX and London’s FTSE 100 gained 0.9% and 1.2% respectively. This slight rebound followed a plunge of 4-5% the previous day, fuelled by fears of intensifying trade tensions, notably between the US and China.
This renewed confidence is largely fuelled by hopes of a resumption of tariff negotiations, particularly after reassuring statements on the ongoing talks between Washington and Tokyo. However, analysts remain cautious, pointing out that this breathing space for the market does not yet mark the end of the turbulence.
The VIX index, which measures investor nervousness, also reached levels close to those seen during the Covid-19 pandemic, reflecting market anxiety over the evolution of geopolitical tensions.
Global trade tensions and their repercussions on Asia
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