European equity markets remain under pressure, and we currently see the German index opening slightly lower at 12.960 points.
After a promising start to the new trading week, the stock market suffered another setback, with the tech stock sell-off accelerating. The decline of the Tesla share price was particularly dramatic – it fell by more than 20 per cent on the day.
There is currently no panic, and some investors see the latest downturn as a healthy correction after several of the tech giants reached staggering heights. The current sell-off will far more likely end up being a temporary setback rather than the beginning of a trend change.
However, the tech stock rout has weighed on market sentiment, and investors in Europe have turned cautious too.
For DAX bulls, the decline below the psychologically important 13,000 level is another defeat. If the index fails to gain momentum soon, they could lose the upper hand and a deeper correction towards 12,500 points could be on the way.
News that the pharmaceutical company AstraZeneca had to pause its vaccine trial after one of the participants experienced severe side effects, put equity markets under additional pressure.
The company stressed that this is a routine measure when there is potentially unexplained illness in one of the trials.
Nevertheless, investors react sensitively to any developments in the race for a COVID-19 vaccine.