Why Europe’s big bounce is bullish for the STI

EUROZONE stocks have roared back towards or even past prior highs in spite of howling over impending doom: dire predictions of natural gas shortages; deadly, freezing winter blackouts; Russian President Vladimir Putin’s westward march; and crippling stagflation.

Those concerns may seem far, far away with banking contagion fears flaring, the Straits Times Index (STI) flattish since mid-November and other measures of stocks still far from 2021 highs. But look globally – Europe’s bullish boomerang bodes well for Singapore stocks too.

Last year, moods surrounding Europe and Britain were dismal. Sentix’s eurozone expectations gauge sank to its lowest level since 2008. Commentators routinely deemed eurozone recession near certain.