European Markets Brace for Further Sell-Off Amid Global Equity Downturn

Global equity markets continue to face sell-offs, extending into Europe. Asian markets, particularly Japan and Hong Kong, saw significant declines. Tech earnings from companies like Alphabet and Tesla have not supported high valuations. European stocks may experience a less severe downturn, but economic surveys and earnings from major companies like Nestle and Hermes remain key factors.

European markets are set to face further declines as the global equity sell-off extends into the region, following significant drops in Asian markets. Japan's Nikkei and Hong Kong's Hang Seng experienced notable losses of up to 3% and 2%, respectively.

Earnings disappointments from tech giants Alphabet and Tesla have failed to sustain market confidence, contributing to Wall Street's sharp downturn from near-record highs. Japan's market, heavily reliant on exports, was particularly impacted by a strengthening yen, reversing from lows around 162 to about 152 per dollar this month, amid suspected interventions by Tokyo ahead of policy decisions from the Bank of Japan and the Federal Reserve on July 31.

Meanwhile, Chinese markets continue to struggle despite a surprise rate cut by Beijing intended to support the economy. European stocks, which have been less volatile over the past months, may see a milder sell-off, but key earnings reports and economic surveys from major companies and countries will be crucial to gauge market sentiment.

On Thursday, earnings from industry heavyweights like AstraZeneca, BAT, Hermes, Nestle, and Sanofi will be under close scrutiny. Nestle's potential price hikes and Hermes's performance in light of waning Chinese demand will be focal points. Additionally, business climate surveys from France, Germany, and the UK will provide critical insights into the broader European economic landscape.

(With inputs from agencies.)