Stocks turn around, leaving traders puzzled

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PARIS (Reuters) – Major European stock markets turned lower and Wall Street index futures widened their losses early in the afternoon on Tuesday, leaving traders puzzled over the sudden trend reversal.

Around 13:00 GMT, the CAC 40 index, which gained up to 0.76% in the morning, lost 0.51% to 6,275.45 points. The European benchmark STOXX 600 index fell 0.79%.

On the New York Stock Exchange, futures contracts on the three major indices are moving down 0.4% for the Dow Jones, 0.6% for the S & P-500 and 0.9% for the Nasdaq .

“There isn’t a lot of movement in other asset classes but stock futures have hit a soft spot,” said a London-based trader.

“Looking at prices and volumes, it feels like the machines have taken over for a second and triggered a micro ‘flash-crash’,” he added.

According to some market participants in Paris, investors took as a pretext information according to which a Chinese military apparatus had flown over Taiwan’s airspace to take profits after a major stock market rally.

“This information is a catalyst, an alibi to take profits, the market trend was already ‘heavy’ since Monday,” Alexandre Baradez, head of market analysis at IG, told Reuters.

(Laetitia Volga, with Thyagaraju Adinarayan in London and Ben Blanchard in Taipei, edited by Patrick Vignal)

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