European stocks started the week mixed
European stocks opened mixed on Monday morning. Signs that the world economic recovery was on course failed to support risk appetite.
In London, the FTSE 100 slipped by 0.35% after the open. Meanwhile, the French CAC plunged 0.18%. The German DAX hiked by 0.16%.
It also came despite reports that Britain’s economy is projected to grow faster since the second world war in 2021.
The EY ITEM Club, a leading UK economic forecasting group, stated that businesses had adapted better to coronavirus restrictions. Consumer spending has boomed as lockdown measures begin to ease. The group said it now projected UK GDP to grow by 6.8% in 2021. It’s a significant upgrade on the 5% growth rate it estimated in January. This would mark the fastest annual growth in national income since 1941.
Obstacles European stocks face defeating overbought
Analysts and investors point to a start to the week that invites greater tranquility. The battle between bulls and bears seems to be the least equal in the first few weeks after the short-term rebound.
The rebound in recent sessions has helped European stock markets recover much of Tuesday’s fall. Analysts believe it is a sign of strength but is more the result of upward inertia than something that invites us to buy.
On the other hand, this rebound continues to seem quite vulnerable.
Each upward stretch in which the EuroStoxx 50 has managed to set new rising highs has caused the buying pressure to be less and less, taking it to the point of overbought that was not seen on the weekly chart since 2017 and 2015.
Last Friday, EuroStoxx closed its first week down after seven consecutive weeks of gains. Once again, it shows how exhausted the bulls are in this section of the season.
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