London: European equities held near levels not seen since the summer on Friday, on track for their best weekly showing in a month and with charts pointing to scope for more near-term gains as long as economic data and earnings remain supportive.
Options expiry during the course of the session was likely to keep the market jittery, with investors wrong-footed by the rally seeking to cover their positions while those who had bet on even bigger gains scramble to increase the chances of a win.
A run of stronger US data has played a key part in supporting risk appetite, so equities will also be paying close attention to February industrial numbers at 6:45pm, and March University of Michigan sentiment index later.
The pan-European FTSE Eurofirst 300 index added 0.1% to 1,103.58 points after rising as far as 1,105.91 on Wednesday, its strongest since July 2011.
The more narrow Euro STOXX 50 index of euro zone blue chips also rose 0.1% by 1:36pm, to 2,598.80, its strongest since August.
The rally has taken the index into overbought territory on the seven-day relative strength index (RSI), but technical analysts said it was too soon to call for an end to the gains.
“There has been quite an impressive rally. We are looking for a potential near-term peak at 2,610-40. But throughout this week, we have so far posted net up days, so there is no sign of selling entering the market. I wouldn’t go short yet,” Anders Soderberg, technical strategist at SEB, said.