EUROPEAN SHARES
Most share benchmarks traded slightly higher in Europe on Wednesday, following a rebound in Asian markets overnight, as equity sell-off takes a break.
The STOXX-50 index opened higher, boosted by solid performances from many sectors such as industrials, consumer cyclicals, and healthcare, while the top movers were among tech and energy shares this morning.
This rebound took place after the market hit another six-month low yesterday, inducing short-sellers to take out some profit as equity markets were on track to their biggest losing streak this year.
In addition, reassuring industrial data from China combined with the prospect of a six-day bank holiday in the nation also added fuel to today’s bullish price action.
The decreased risk environment can also be seen across other asset classes, as stable price action in the EUR currency combined with higher EU Treasuries tends to support the current bullish trend towards equity markets.
However, many wonder if today’s price action will last or will be just a bullish technical correction inside a deeper bearish trend. Indeed, the fundamentals haven’t significantly changed, and investors will need new, clear, bullish market drivers in order to invert the trend.
The latest US core durable goods orders and crude oil inventories may provide traders with more clues about where the macro will go in the short to mid-term basis later this afternoon.
Pierre Veyret– Technical analyst, ActivTrades
Source: ActivTrader
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