On Monday, the European shares slightly back from two-year highs early and the number of indicators suggested a bullish run for markets at the start of this year that could be hitting its peak. The FTSEurofirst 300 slid 1.55 points, or 0.1%, to 1,173.26, which compared to a near two-year high of 1,174.81 achieved on Friday.

The equity funds outgained bond funds for a seventh consecutive week last week but the measure of inflows slowed, the EPFR Global data indicated and several major investment banks said that there were signs market might be reaching the natural top.

The Citigroup U.S. Economic Surprise Indicator has closed in negative territory , and a bullish sentiment as measured by the AAII Investor Sentiment Survey, is now in the top 5 % of the observed readings.

JP Morgan said in a note that the historical data for each of readings indicates they are normally followed by the lacklustre equity returns, while downgrading its weighting in the cyclicals versus defensives.

Meanwhile, technical analysts said that the FTSEurofirst 300 and the more broader Stoxx 600 were in overbought territory according to 14-day relative strength indexes that measure the magnitude of the recent gains to the recent losses in an effort to determine overbought and to oversold conditions also.

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