Ulrike Rondorf, head of investment strategy at Lampe Asset Management, attributes the sharp sell‑off in European equity markets to specific investor behaviour as well as fundamental factors such as the energy‑price shock. She believes that large U.S. asset managers, influenced by the Iran war, are unwinding their positions in Europe and emerging markets. These investors had only recently begun to deploy funds in those regions, a move reflected in the strong performance of European and emerging‑market stocks earlier this year.
Speaking on a Handelsblatt podcast, Rondorf noted that during a shock moment like the war, American investors tend to pull money back. “The renewed strength of the U.S. dollar arrives at a bad time for many of the riskier currencies in emerging markets” she said, adding that those markets had positioned themselves for a prolonged dollar weakness and have thus benefited substantially from U.S. dollar‑sensitive equities so far.
The euro fell below 1.16 U.S. dollars on Tuesday, a move that could be a positive catalyst for European exporters. However, Rondorf emphasised that current concerns about the economy, particularly higher energy prices, dominate sentiment.