(CercleFinance.com) – Barclays on Wednesday raised its projection for the pan-European STOXX Europe 600 index, which the British bank now sees reaching 540 points at the end of the year, and no longer 510 points as up to now.
The London establishment believes that despite its notable progression since the start of the year, the STOXX 600 index still has potential to catch up given the upturn in growth, the revival of activity in China, the outlook upcoming rate cuts and low levels of stock market valuations.
In its note, Barclays explains that it has moved to a ‘tactical’ position consisting of ‘overweighting’ European equities, with a particular preference for values linked to consumption, if possible of quality such as LVMH and Hermès.
The investment bank also advises overweighting the financial services, basic materials and energy sectors.
Its analysts, on the other hand, display a ‘weight in line with the market’ recommendation on health, technology, capital goods (excluding aeronautics/defense) and real estate.
Community services, telecoms and essential consumption are, for their part, recommended to be ‘underweighted’ by strategists.
At current prices, Barclays’ new target shows upside potential of more than 6% for the pan-European benchmark.
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