LONDON — European stocks closed sharply lower on Wednesday, tracking losses on Wall Street and in Asia-Pacific markets.
The pan-European Stoxx 600 index provisionally ended down 1%, with most sectors and major bourses in negative territory. Technology stocks dropped 3.2% to lead losses, while household goods fell 2%.
The broad declines stateside prompted Asia-Pacific markets to plunge overnight, with Japan’s Nikkei 225 down 3.19%, leading losses in Asia, while the broad-based Topix was down 2.79%.
“I don’t think we’ve got clarity as to whether the [U.S.] economy’s doing any more than slowing its growth rate, or earnings are really falling at an index level in a meaningful way,” Freddie Lait, chief investment officer at Latitude Investment Management, told CNBC’s “Squawk Box Europe” on Wednesday.
“To me, it’s much more about momentum and technicals than it is about fundamentals at the moment, and that’s frankly what led the market last month in that big crash and recovery that we saw. It’s not individual, long-term, fundamental investors driving these markets anymore.”
Lait added, “It’s the momentum traders, it’s the macro traders, it’s the high-frequency traders, it’s all the other players in the market that have different reasons to be trading stocks [on] shorter time frames or different kinds of investment philosophies that tend to cause these moves to be larger than they would have been in the past. So I’m not trying to rationalize it.”
In corporate news, Volvo Cars dropped more than 4% after analysts at BNP Paribas on Tuesday cut their rating on the Swedish automaker to underperform from neutral.
The stock remained lower after Volvo Cars on Wednesday afternoon announced it would cut its electrification targets from 100% fully-electric sales by 2030, to 90-100%. It said “changing market conditions and customer demands” were responsible for the change, which “will allow for a limited number of mild hybrid models to be sold, if needed.”
Investors are meanwhile monitoring drama in the auto industry as Volkswagen bosses hold a tense townhall — heavily attended by union representatives — to discuss possible domestic factory closures.