Home > Market update: European stocks retreat, Turkish lira plummets

Market update: European stocks retreat, Turkish lira plummets

  • Stoxx 600 and FTSE 100 are down amid pandemic concerns
  • CNBC's Jim Cramer says not time to sell stocks
  • Turkish lira sinks to record low against the dollar and euro

European stocks opened higher on Tuesday after a turgid Monday but are seeing increased pressure as concerns over a fresh surge in Covid-19 infections hit the Eurozone.

On Monday, Germany warned its citizens that only increased vaccination would help stem the new wave of infections, days after Austria became the first country in the EU to announce a 20-day national lockdown.

The pan-European Stoxx 600 index was down 1% around 11:00 GMT, most of the losses largely within the tech sector. Elsewhere, UK’s FTSE 100 was holding just above Monday’s close at 7249 and 0.1% down while Germany's DAX was down 0.72%%.

Panic selling now is a big mistake- Jim Cramer

CNBC’s Jim Cramer has cautioned that investors might be making a huge mistake if they panic sell stocks just because of the surging Covid-19 cases.

Cramer says such investors risk being “left behind”, and that sell-offs at this time of the pandemic is only providing buy opportunities to others. The “Mad Money” host says this could be the time to buy a few of the major stocks that have recently hit a downtrend.

US inflation outlook and probable interest hikes also played into the hands of the bears as Fed Chair Jerome Powell got President Joe Biden’s nod for a second 4-year term. In Europe, rising prices could prove a sentiment dampener.

As noted above, Cramer is bullish on Wall Street and thinks there are companies whose earnings season beat estimates, but their stocks somehow sold off. These stocks have strong fundamentals and provide a decent opportunity for great gains post-2021.

He outlines investment bank Morgan Stanley, health insurer Centene, pharmaceutical giant Johnson & Johnson, and logistics firm UPS as some of the stocks to watch.

Turkish lira plunges

Tuesday saw the Turkish lira fall to its lowest level against the dollar, with the currency seeing a sell-off catalysed by negative sentiment about Turkey’s economy.

The lira touched lows of 12.8, well below the crucial support at 11.00 to the dollar after sinking more than 12% on Tuesday. The currency also saw losses against the euro, hitting a new all-time low of 13.8815 on Tuesday morning.

Market data shows the lira has devalued by about 20% over the past week, with a year-to-date performance at -40%.

The currency’s sharp sell-off followed comments from President Recep Tayyip Erdogan, whose belief is that the central bank is on the right track despite Turkey facing higher inflation.

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