It appears that bullish talk of an equities revival in Europe may be being borne out.

In its latest trading statement, released last Thursday, the London Stock Exchange said that it had “made a positive start” to 2013 and that there “are good indications of forthcoming new and further capital raising activity”.

Like most exchanges in Europe, the LSE struggled in 2012 as the 12-month period just gone was one of plunging volumes for many bourses. Last week, Paris-based lobby group the World Federation of Exchanges revealed that on-exchange equity volumes were down by over a fifth for the whole of 2012.

But as more positive economic data continues to land across the globe, many market users are beginning to be convinced that a significant corner has now been turned since the start of the year.

Global benchmarks, such as the FTSE 100 and S&P 500, have already touched highs in January not seen since before the collapse of U.S. investment bank Lehman Brothers in September 2008. The FTSE 100 has also gained over 6% since the start of the year—its best start for over two decades.

While the Bank of America Merrill Lynch revealed on Friday that $35 billion had come back into equity funds globally in the last two weeks, of which $19 billion went into long-only equity funds.

“The great rotation has begun and the big picture is transitioning from deflation and deleveraging to a normalization of growth, rates and risk appetite,” said Michael Hartnett, chief investment strategist of Bank of America Merrill Lynch in a note to clients. “And while the industry flow data does not show ‘rotation’ out of bonds, our private client data does.”

Some of the big institutional investors may still be keeping their money in safe-haven assets such as bonds and away from equities, with the global economy far from out of the woods yet.

Anecdotally at least, some hedge funds, too, are underweight in equities at present but appear to be biding their time before making a concerted plunge into the asset class.

This could be due to potentially downbeat economic news expected to land in the coming weeks.

“Investor sentiment throughout January has been undeniably buoyant,” said Oliver Wallin, investment director at Octopus Investments, a U.K. investment manager.

“However, February could prove more challenging, as the Italian general election will bring the European Union back into focus, while the next phase of U.S. policy discussions (spending cuts) also offer the potential to set investor alarm bells ringing.

“From a company perspective, earnings season will be over, so positive news flow from corporates will be thinner on the ground. Prospects for 2013 remain positive, so a slightly unsettled February may throw up opportunities to build exposure to risk assets at better prices.”