EUROPEAN SHARES
European shares edged higher for a second day, following the trend registered in Asia overnight and amid growing risk appetite ahead of tech earnings this week. Geopolitical tensions and monetary worries are getting out of the light as investors focus on the significant corporate results due in the next few days. While some traders may worry about companies’ ability to deliver earnings sustaining the current high valuation levels, most investors remain optimistic, especially regarding the Tech sector.
Cloud businesses, chipmakers and AI-related shares are in focus, and investors seem to have high expectations prior to the release of corporate results from this sector. The German software company SAP SE sits as the top mover in Europe today, with a surge in price brought by an increasing global appetite for AI.
However, with such high expectations from investors, corporate results will need to demonstrate both resilience and more growth potential to sustain appetite for risk and offset some of the uncertainty brought by geopolitical conflicts and a lingering hawkish stance from the Fed.
Disappointing corporate results could dramatically impact equity markets this week, as solid earnings may be the last reason for investors to remain in a more and more uncertain trading environment. The STOXX-50 index still flirts with its 4,965pts resistance level, below its short-term bearish trendline.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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