Markets mixed, Boxing Day rally may be “no more than a wicked bear trap”

Markets were mixed on Thursday.

The S&P 500 reversed early losses to close 0.9 percent higher while the Nikkei 225 surged 3.8 percent.

However, the STOXX Europe 600 tumbled 1.7 percent.

Meanwhile, some analysts are not impressed by the US stock market's 5 percent rally on Wednesday.

“Such rallies are not uncommon in troubled times, and we have experienced many of them in past bear markets,” said Hussein Sayed, market strategist at FXTM, in a note.

Russ Mould, investment director at AJ Bell, noted that historically, gains of 5 percent or more usually came during bear markets.

Mould said “there is still a risk that this year’s Boxing Day bonanza could be no more than a wicked bear trap set to lure investors into more trouble”.

Jeff deGraaf, chairman of Renaissance Macro, said that while it is possible that stocks set a tactical low on Wednesday, it remains unlikely that an “ultimate low” has been established.