European companies are seeing outsized gains and losses in their shares when they report earnings, a Reuters analysis shows, a trend that has more to do with the growing sway of fast money in the $15 trillion market than with business prospects.
Take the top 60 companies in Europe’s broad STOXX 600 Index: when they reported earnings over the past year, their average daily stock moves were 18 per cent higher than eight years ago, the analysis of more than 120,000 days of share price data from LSEG shows.
The swings on earnings days over the past 12 months were the largest since at least 2016, when compared to average daily moves, the survey shows.
The reasons for this rise in volatility are hard to pin down precisely but stem in large part from the growing dominance of hedge funds that chase trends in…
