Short sellers across Europe took a hit on Thursday as several of the region’s most heavily shorted stocks – including Kering SA, Volvo Car AB, Rentokil Initial Plc, Metso Oyj, and Nokia Oyj – surged sharply following better-than-expected quarterly results, according to a report by Bloomberg.
Volvo Car jumped as much as 41%, while Gucci-owner Kering climbed 11%, triggering a wave of short covering among bearish investors. Bloomberg data suggest paper losses of around €180m ($209m) for short sellers in Kering and €127m for those in Volvo Car alone.
Analysts said the outsized gains were driven by investors scrambling to unwind positions in “unloved” names.
A Barclays basket of Europe’s most-shorted stocks — which includes Kering, Volvo Car, Pernod Ricard, BMW, Alstom, H&M, and Swatch Group — has outperformed the Stoxx Europe 600 since late August, underscoring the extent of the short squeeze.
The dynamic echoes recent US market trends, where heavily shorted names have rallied strongly this earnings season. With sentiment continuing to improve across global equities, short sellers are being forced to retreat.
