European equities may be close to a bottom as bearish investors price in a sharp economic slowdown and a flurry of political risks such as Brexit, asset manager BlackRock said in a note on Wednesday.
“Given the significantly bearish sentiment and positioning towards European equities, we could be nearing the point of maximum pain for the European market, particularly if fundamentals stabilize and improve from here,” wrote Nigel Bolton, who heads the BlackRock European Equity Team.
While Bolton saw “opportunity” for a “gentle increase” in European growth this year, he warned that company results could nevertheless disappoint, flagging risks of earnings downgrades across the market, particularly in leveraged companies. -Reuters
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-Julien Ponthus