The European stock market experienced the largest sell-off by hedge funds in a decade in March and April, according to data from Goldman Sachs (NYSE:GS). The reasons were concerns about the proposed tariffs of the Trump administration and the strengthening of the euro, which could hit export-oriented industries. The STOXX 600 index, which includes companies that earn up to 60% of their income abroad, has come under particular pressure. Almost half of these revenues are generated in the United States, making companies particularly vulnerable to changes in trade policy. Hedge funds have revised their strategies, switching from long positions, suggesting growth in stocks, to short trades aimed at reducing their value. In two months, the shares were sold out for two thirds of the trading days. The automotive sector and luxury goods manufacturers, which are sensitive to tariff risks, have experienced particular pressure. An additional factor in the decline was the disappointing financial results of luxury goods companies. This intensified the sell-off, exacerbating the decline in stock prices in key industries.
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