Equities remain in a state of selling today, reflecting the trend seen throughout this week. Below is an overview of the current performance of European indices, factoring in the present level of losses.

This isn’t only isolated to Europe, with Wall Street also seeing a streak of losses stretching to last Friday.

This week, there are several stories that are affecting people’s mood. Firstly, China’s economic stimulus plan has not met expectations, leading to disappointment in the markets. In addition, yesterday’s higher-than-anticipated inflation data in the UK fueled concerns about potential long-term price increases in Europe.

Furthermore, the overall aftermath of elevated interest rates is also adversely impacting the borrowing landscape and negatively influencing the economic projections for the year. In light of the fact that global expansion can no longer depend on China, there might be a lack of positivity regarding future prospects.

Alternatively, the reason for the selling may be much more straightforward. It could be a case of investors shifting their focus from stocks to bonds in anticipation of the end of the quarter, resulting in increased flows. After a strong performance in Q2, equities could be experiencing a rebalancing in the later stages of June as the quarter draws to a close.

One could reasonably make a case for either side of the issue, and perhaps the sales are influenced by both factors to some extent. This creates a challenging situation as we approach the end of the week, and the emphasis on month-end and quarter-end looks to persist into next week.

What do you think about this situation?