Investing.com - A number of European equity indices have hit record highs in the last few trading days, and Citi has noted the strong bullish momentum in the region.
Both the FTSE 100 index in the U.K. and the benchmark European Stoxx 600 index posted all-time highs on Friday as investors added significantly to bullish positions across European indices over the past week.
The top three most extended markets and the three most positively changed markets are all European, according to Citi.
“The strongest increase was in FTSE with $1.7 billion new longs added as investors became increasingly optimistic ahead of the BoE rate decision. Further flows were observed following a positive surprise in UK economic growth at the end of the week,” the bank said, in a note dated May 13.
Net positioning indicates growing optimism on both Europe and U.K. equities, the U.S. bank added, but the extended and one-sided nature of positioning also shows how consensus risk-on has become.
This contrasts with much more moderate flows in the U.S. where Nasdaq is net neutral and S&P is only moderately bullish.
“Nasdaq positioning is neutral after an extended period of de-grossing by investors indicating much lower risk appetite than for S&P where $9 billion new longs were added in the last week. However, investors are still only moderately bullish S&P,” the bank said.
Investor optimism has also been fading in Australia and Japan, while it is mixed in China, and that leaves Europe as the region with the largest positive flow momentum.