(Reuters) – Air France-KLM shares on Thursday signed one of the biggest gains in the SBF 120 index in the morning, analysts suspecting a new episode of forced liquidations of short positions (‘short squeeze’) on one of the best-selling stocks in the airline industry.
At 11:35 am, the title gained 4.25% to 5.64 euros after taking more than 10% at the start of the session.
“The rise of Air France-KLM and that of Lufthansa, above other values in the sector, may reflect the unwinding of some short positions, given that these two airlines are among the best-selling in the sector,” said Neil Glynn at Credit Suisse.
The analyst adds that the two groups are also among the most sensitive to any change in outlook on the resumption of traffic.
“A ‘short squeeze’ is the only thing that makes sense,” said Nuala McMahon, analyst at Goodbody, of Air France-KLM’s 10% jump. A point of view also shared by an analyst at Bernstein.
The German Lufthansa took 3.3% at the height of the session before reducing its gains.
The ‘short squeeze’ phenomenon fueled a surge in volatility in the American and European markets from the end of January. The prices of several struggling companies, like GameStop, and targeted by investment funds specializing in short selling, have soared after a wave of purchases encouraged by private investors gathered on social media forums.
(Sarah Morland, French version Laetitia Volga, edited by Jean-Michel Bélot)
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