Europe's opening jump in technology and telecoms stocks quickly ran out of steam today as Nasdaq futures slumped two per cent, dashing hopes that Wall Street's rebound yesterday would be backed by follow-through buying.
"People are just not putting money into the market with nobody willing to take big bets, and quite rightly so as transparency is not there yet," said Mr Philipp Buchli, vice president of equity sales at Bank Julius Baer.
"People are going to hold out until they think things have found a bottom, and the risk to reward ratios are better. Liquidity is abysmal," Mr Buchli added.
After opening higher, the pan-European FTSE Eurotop 300 index was down 0.8 per cent, with the Euro Stoxx 50 index one per cent lower.
The Eurotop 300 has fallen to its weakest since November 5th, 1999.
Nasdaq 100 futures fell two per cent, while the S&P stock index futures eased one per cent.
Yesterday, the Nasdaq Composite jumped 4.75 per cent to close back above 2,000 points after two days of heavy selling. The Dow Jones industrial average gained 0.8 per cent to end at 10,290.80 points.
The chemical sector was among the weakest in Europe as its biggest constituent, Germany's BASF fell 1.35 per cent despite posting a better-than-expected fourth-quarter profit.
Investors are worried about the impact of economic slowdown on the chemical industry, dealers said, adding that the morning's tech rebound was also taking the market's attention away from old economy plays.