London, United Kingdom | AFP | Europe’s major stock markets churned lower Wednesday as investors took their cue from downbeat sentiment in Asia, while Wall Street resumed its upward trend.
Virtual currency bitcoin meanwhile dived, falling below $10,000 for the first time in six weeks in what one analyst called a “cryptocalypse” that saw several digital units take a hammering.
London stocks fell “as traders opt to lock in profits following the latest rally,” noted Russ Mould, investment director at online stockbroker AJ Bell.
Adding to the gloom, disappointing earnings eclipsed takeover activity in the British capital.
Publisher and conference organiser Informa revealed it was in talks to buy rival UBM to create a giant worth more than £9.0 billion ($12.4 billion, 10.1 billion euros).
The deal is aimed at accelerating growth and slashing costs, the companies said in a statement. But investors were unconvinced, sending Informa shares tumbling.
The FTSE 100 was also punished as poor results from luxury fashion giant Burberry and publisher Pearson sent the two companies’ share prices diving.
– ‘Cryptocalypse’ for bitcoin –
Bitcoin fell below $10,000 for the first time since early December, as the leading cryptocurrency extended Tuesday’s 15 percent slump.
The fierce selling also spread to other alternative digital units, with ethereum, ripple and litecoin all losing about a quarter of their value Tuesday.
Bitcoin is down from record highs approaching $20,000 in the week before Christmas, having rocketed 25-fold over the year before being hit by concerns about a bubble and worries about crackdowns on trading it.
“It’s been a Cryptocalypse overnight with BTC (bitcoin) and other virtual currencies coming under heavy selling pressure,” said Greg McKenna, chief market strategist at AxiTrader.
But Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers, sounded a slightly positive note: “Not all hope is lost. The cryptocurrency market is privy to these wild swings and seasoned veterans in this space have seen this happen many times previously.
“Not saying that it couldn’t be different this time but every major correction has been followed up by a rally more powerful than the last.”
David Cheetham, chief market analyst at XTB also warned against burying bitcoin prematurely.
“There have been numerous occasions when a sell-off in Bitcoin has prompted non-believers to rush in with declarations of the speculative bubble bursting, and each time they have been wrong,” he said.
But “crypto bulls” were still “in very real danger of getting badly burned with a substantial further decline ahead entirely feasible”, he added.