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Europe Traders Aren’t Waiting Around to See If Rebound Holds

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European stocks, which plunged 17 percent to start the year then recouped half the losses, are suddenly treading water. The onset of calm is failing to stem a crush of withdrawals among fund investors.

After surging 14 percent in a five-week rebound through March 14, the Stoxx Europe 600 Index has hit a wall. It’s traded in a range of about 14 points for most of March and is heading for a 2 percent monthly advance, the smallest move in almost a year.

Investors who got burned earlier this year as the region’s equities entered bear territory are reluctant to return to the market amid a faltering recovery. Economic data have been missing projections since January, analysts estimate a 1.6 percent drop in net income for Stoxx 600 companies this year, and managers have withdrawn money from European equity funds for seven straight weeks, the longest streak since October 2014, according to a Bank of America Corp. survey.

Bloomberg

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
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