European stocks took a new positive direction on the first day of trading of the year as investors and traders took profits home after suffering losses from the downfall of the year 2022 stock market.
Traders reportedly took advantage of undervalued stocks across Europe, except in UK and Switzerland where markets were on lock and key for the holiday.
Investors king gathered that Stoxx Europe 600 closed 1% higher, with a trading volume of roughly a third of the average over the past 30 days.
The stock market profits were led by the automotive, energy and retail sectors amidst other individual stocks, which were also part of last year’s biggest losers.
In 2022, European shares slumped 13% following aggressive central bank tightening coupled with the war between Russia and Ukraine.
Ulrich Urbahn, Head of Multi-Asset Strategy and Research at Berenberg Bank, Hamburg, Germany said “The first half remains very difficult given worsening liquidity and the lagged effects of the financial tightening”.
He added that “Once the inflation hump is over, markets are likely to focus on growth. Growth is likely to weaken before improving later in the year”.
Urich highlighted cheaper valuations, low risk positioning and high cash balances are among the factors that will contribute to a promising and better 2023 for traders and investors than 2022.
