Spreadex Market Update
Volkswagen scandal continues to dominate on quiet Tuesday morning
Arguably the driver of Monday’s growth was the re-election of Alexis Tsipras and his Syriza party in Greece. However, the goodwill generated from that result is unlikely to hold too much sway over the markets today; in fact, it was probably the lack of macro-direction on the markets that allowed the Greek election to have any sway in the first place. Of course that doesn’t help investors this Tuesday, who will be left searching for a sense of direction in the no man’s land between last week’s Fed statement and the next big number, ostensibly Friday’s US GDP figure.
So, what does all that translate to at the European open? Well, the FTSE slipped by around 20 points, in contrast to the robust start to the day it had on Monday. There is little for the UK index to work with this Tuesday; the public sector net borrowing number is released later in this morning, but is unlikely to be too much of a market mover unless there is something really unexpected with the figure.
There was more action in the Eurozone, namely because of the ongoing, and ever-expanding, Volkswagen emissions scandal. News that South Korea, as well as the US, would be investigating the company’s diesel cars took the stock over 4% lower (and counting) immediately after the bell, pushing VW to a further 3 year low (and continuing to have a nasty knock on effect for majority shareholder Porsche and the rest of the auto-sector). This meant the DAX quickly fell back below 10000, whilst the CAC, losing its post-Greek election shine, lost around 30 points.
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