LONDON, May 7 (Reuters) – Euro zone blue chips rallied in
thin volume on Monday as banks led a technical rebound,
strengthened by signs Spain was opening the door to using public
funds to aid its troubled lenders.
The Euro STOXX 50 index provisionally closed 1.5
percent higher at 2,282.89, having traded around 90 percent of
its 90-day average as the UK and Irish markets were shut for
public holidays.
The index rebounded from an initial reaction to French and
Greek election results which had sent it to 4-1/2 month lows,
leaving the gauge in what traders said was oversold territory on
the 7-day relative strength index before the gradual rebound.
“We just had a bear trap this morning on the Euro STOXX 50,”
said Nicolas Suiffet, an analyst at Paris-based technical
analysis firm, Trading Central, referring to a situation where
expectations that a rising market trend will prove temporary and
that the previous bear market will resume turn out to be false.
Spanish banks were among top gainers as Prime Minister
Mariano Rajoy said public money could be used as a last resort
to aid the banking sector.
