Retail Investors Bullish on Spanish Equity Index

  • Trading Systems
  • 07.07.2021 09:20 am
  • Retail investor sentiment turned sharply bullish towards Spanish IBEX 35 in June
  • Positive development also towards French CAC 40 index
  • 63.8m securitised derivatives were traded on Spectrum last month

Spectrum Markets, the pan-European trading venue for securitised derivatives, has published its SERIXTM European retail investor sentiment data for June (see below for more information on methodology), noting strong bullish sentiment on the Spanish IBEX 35 index, and continued improving sentiment towards France’s CAC 40.

Sentiment on the IBEX turned sharply bullish last month, with its SERIXTM value leaping from a bearish 98 in May to 119 in June. This came as the Bank of Spain upgraded its growth forecast for the year to 6.2% after signs that the impact of COVID-19 is waning and employment figures are starting to improve as the economy reopens.

“Spain has maintained a relatively high level of government support for key sectors throughout the pandemic, particularly in areas like hospitality and tourism, and these look well placed to rebound as demand recovers. Alongside this, payments from the EU recovery fund and a steady low-interest scenario could provide an additional boost,” notes Michael Hall, Head of Business Development at Spectrum Markets.

Meanwhile retail investors look to be softening their stance towards France as the SERIXTM on the CAC has risen steadily from a historic monthly low of 85 in February, to reach 95 in June.

“We’re still in bearish territory with France, but sentiment has clearly been improving over time, no doubt driven by the country’s encouraging economic data, vaccine success and further easing of lockdown policies,” Hall explains.

During June, 63.8 million securitised derivatives were traded on Spectrum, with 31.5% of trades taking place outside of traditional hours (i.e. between 17:30 and 9:00 CET). 86.5% of this activity was on indices, 7.2% on commodities, and 6.3% on currency pairs, with the top three traded underlying markets being OMX 30 (27.6%), DAX (27.5%) and NASDAQ 100 (13.1%).

Looking at the SERIXTM data for the top three underlying markets, the OMX reversed some of the bullish momentum seen this year dropping to 94 in June, while the DAX remained stable just inside bearish territory, falling from 99 to 98. Sentiment on NASDAQ meanwhile dropped sharply to 91, down from 102 in May.

Calculating SERIXTM data

The Spectrum European Retail Investor Index (SERIXTM), uses the exchange’s pan-European trading data to shed light on investor sentiment towards current development in financial markets.

The index is calculated on a monthly basis by subtracting the proportion of bearish trades from the proportion of bullish trades, to give a single figure (rebased at 100) that indicates the strength and direction of sentiment:

SERIXTM = (% bullish trades - % bearish trades) + 100

Trades where long instruments are bought and trades where short instruments are sold are both considered bullish trades, while trades where long instruments are sold and trades where short instruments are bought are considered bearish trades. (For a detailed methodology and examples, please visit this link).

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