European markets opened cautiously Friday, with the German DAX index experiencing a subdued start following a significant sell-off on Wall Street. The benchmark index was calculated at approximately 23,095 points around 9:30 AM, representing a 0.8 percent decrease from the previous day’s closing level. This downturn reflects growing anxieties surrounding the perceived artificial intelligence bubble and a broader investor nervousness about the stability of the technology sector.
Analysts point to the rapid reversal of initial enthusiasm following Nvidia’s earnings report as a key driver of the market’s current fragility. The NASDAQ 100 endured its second-weakest trading day since the tariff-induced turmoil of April, accompanied by unusually high trading volumes – a signal, according to QC Partners’ Thomas Altmann, of a “panic sell-off” as investors shed positions. He noted that volumes were surpassed only by the period following threats of new tariffs against China, underscoring the depth of the prevailing unease. The seasonal reluctance of investors to establish new positions toward year-end is also contributing to the dearth of buying pressure.
The NASDAQ 100’s volatility index is currently at levels not seen since April, further weighing on the DAX, which enters trading this morning burdened by the Wall Street’s performance. The DAX’s sustained presence below the crucial 200-day moving average for the third consecutive day – a pattern last observed at the tail end of 2023 – suggests a potential shift in market sentiment and could signal further instability.
While today’s options expiry is unlikely to exert significant influence on the DAX, with no major contracts rolling off in this relatively minor November expiry period, some limited tension could arise from two outstanding put positions at 23,200 and 23,400 points, encompassing approximately 3,500 and 3,800 contracts respectively.
The euro strengthened marginally against the dollar at Friday morning’s open, trading at $1.1549, or €0.8659 per dollar. Precious metals experienced downward pressure, with gold fetching $4,047 per fine ounce (-0.7 percent), equivalent to €112.65 per gram. The oil price also suffered a decline, with a barrel of North Sea Brent crude costing $62.36, representing a decrease of 102 cents or 1.6 percent compared to the previous day’s close.