European shares plunged during the trading session today on the back of the overall weakness seen in the Shanghai markets which plummeted by close to 8 percent. The plunge in Chinese equity markets led to a sell off in commodities which hurt energy producing companies across Europe. The euro came under selling pressure during the trading session on the back of traders moving towards safe haven currencies like the dollar which was seen as a huge negative. It is imperative to state that European equities ended the previous weeks’ trading session on the back-foot and the sell off seen today is being seen as a hugely bearish sign.
It was reported today that negotiators from the country’s creditors were arriving in Athens to get technical negotiations on a new multibillion euro rescue package underway. However, the spokeswoman said that the negotiations would not start until later this week at the earliest. It is important to point towards the fact that negotiators were expected to arrive in Athens last Friday. Stock markets across Europe are under pressure over the last couple of trading sessions on the back of fears that the delay means that Greece’s third bailout is already encountering difficulties.
All eyes would be on the FOMC meeting which kicks-off later this week with investors and analysts keeping a close eye on whether or not the Federal Reserve provides a timeline for the first rate hike in close to seven years. Many analysts and investors believe that the Federal Reserve might start hiking rates by as early as September this year which could become a cause for concern for equities around the globe. It is imperative to state that the Federal Reserve Chairwoman over the past month has been talking about a rate hike by the end of the year.