Investing.com -- European stocks experienced a significant sell-off by hedge funds in March and April, marking the largest amount in a decade, as per a report by Goldman Sachs.
According to the bank’s strategists, this trend was driven by concerns over President Trump’s proposed tariffs and a strong euro, both of which could potentially impact Europe’s export-reliant economy.
The STOXX 600 index, which includes companies that generate 60% of their revenues internationally, saw a significant portion of these sales. The U.S. market, in particular, accounts for nearly half of these overseas revenues.
Over the past two months, hedge funds have shifted their strategies from long bets, anticipating rising stocks, to short trades, expecting a fall in European assets.
During March and April, traders were net sellers of European stocks for two thirds of the days. The sell-off was particularly concentrated in single stocks sensitive to tariffs, notably within the auto and luxury goods industries.
The sell-off in luxury goods stocks was further accelerated following disappointing earnings reports.