Forget This Year’s Highs for European Stocks, Strategists Warn

(Bloomberg) -- In a rollercoaster year, the highs for the European stock market may already be behind us.

Strategists on average expect the Euro Stoxx 50 Index to finish 2020 at a level of 3,098, implying a drop of 4.5% from Tuesday’s close. They forecast a year-end level of 367 for the broader Stoxx Europe 600 Index, suggesting a potential gain of just 1%.

European stocks recouped more than two-thirds of the pandemic-induced losses at remarkable speed, before the rebound turned bumpy in June. The Stoxx 600 is regaining some momentum, up again 0.9% on Wednesday, upon news of U.S. fiscal and monetary stimulus plans, after slumping the most since March last week amid concerns about a second wave of coronavirus infections.

Forget This Year’s Highs for European Stocks, Strategists Warn

The region’s equities may not revisit the doldrums of March, thanks to the massive stimulus programs that are putting a floor to the market, but neither are they seen reaching fresh peaks. Uncertainty remains over the pandemic’s impact on earnings and the economy, prompting a wide range in strategists’ calls.

Among the most bullish is Deutsche Bank AG, calling for the Stoxx 600 to close the year at 440, or about 21% higher than Tuesday’s close. At the other end is Oddo BHF, predicting an 11% drop to 322.

For tables on the Euro Stoxx 50 and Stoxx 600 polls click here; for a table on the DAX poll click here, for a table on the FTSE 100 poll click here.

©2020 Bloomberg L.P.

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