ActivTrades analyst: Jan 2 European share rise may be short-lived
According to an analyst at the ActivTrades global brokerage, it is too early to see a remarkable rise in European shares during this year’s first trading session on January 2 as a stable long-term situation.
A “lack of any major macro news” suggests the share price surge with the FTSE 100, EURO DAX 50 and CAC 40 indices all going up was “a liquidity bull trap covering some of last year’s short positions” rather than an indication of “directional motivations” by portfolio managers, technical analyst Pierre Veyret said in a brief report.
Moreover, the session’s transaction volumes, though having shown an increase, were still too low for a non-bank holiday, he said.
“Such a high volatility environment combined with lower market liquidity is often taken as a dangerous sign by stock traders,” Veyret said.
Reuters argued that the January 2 rise was a reaction to eurozone manufacturing data, which “suggested the worst had passed after a year marred by fears of a recession as central banks hiked rates globally”.
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