(Bloomberg) -- Year-end pressures on high-yield portfolios are making the European market more vulnerable to a broad based selloff seen in the U.S., and Europe had another jittery start today.
Markit’s iTraxx Crossover Index is wider by 7 basis points and Astaldi SpA bonds are plummeting to fresh lows, dragging other construction firms like Saipem SpA and Grupo Aldesa SA down with them.
"We’re getting to a tired market coming into year end," David Riley, head of credit strategy at BlueBay Asset Management LLP in London, said in an interview on Bloomberg TV. "Investors are rightly concerned about valuations. We’ve been booking some profits. I think we’re not alone."
"For traders with calendar year-end P&Ls it’s easy to see why their risk appetite is subdued after such a strong year," Mark Holman, CEO of TwentyFour Asset Management, wrote in an emailed note to clients. Traders "will be cognisant of adding to inventory with, realistically, only three ‘normal’ trading weeks left this year," he said.
Taking into account fundamentals "we doubt the current weakness is the start of a bigger correction," Holman said.
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