ECB’s Knot: stock market rally could be fuelled by recovery hopes

AMSTERDAM, Jan 31 (Reuters) – The continuing rise of stock markets worldwide could be the result of growing hopes of economic recovery, and does not necessarily mean that prices are overly inflated, European Central Bank governing council member Klaas Knot said on Sunday.

“We definitely see high valuations,” the Dutch central bank governor said in an interview on Dutch public television.

“Stock markets could be preempting the roll out of vaccines and the reopening of economies. We might be entering the roaring twenties.”

But Knot warned individual investors against joining the recent rallies in companies such as GameStop.

“If this becomes a race between individuals and professional investors, it is clear who will suffer in the end: the small investor,” he said. (Reporting by Bart Meijer; Editing by Catherine Evans)