The European share index Eurostoxx 600 has at times lost almost 23% since its last high in January. Similar to the Eurostoxxs 50, it thus tracks a strong corrective movement of the European stock market. However, according to analysts at Goldman Sachs, this correction could intensify. They write in a recent note to clients that they expect the STOXX 600 to decline another 8% on a three-month basis from current levels. Cyclical stocks in particular, such as chemicals and construction, are likely to perform much worse than the overall market in the current environment of slowing growth and rising interest rates. In the longer term, however, analysts expect a slight recovery of up to 4% by 2024.
This currently very bearish assessment of the index could offer short opportunities. The overcoming of the support at 400 points about a week ago was followed by a price decline to 385 points in the last few days. If this downward movement were to continue, the price would first have to break a resistance at 382 points, but could then drop to 338 points in the medium term. If, on the other hand, the price initiates a new upward movement, the resistance at 400 points could become relevant again.