Citigroup has become the most optimistic institution about European stocks, expecting the European stock market to rise by another 6% from its current historical high.
Citigroup's strategist team led by Beata Manthey has raised the year-end target for the Stoxx 600 index from the previous 510 points to 540 points, making it the most optimistic target among the strategists tracked by Bloomberg. They believe that the increasingly clear expectations of interest rate cuts, gradual improvement in global growth prospects, and the weakening of the US dollar are all positive for European stocks.
This week, the Stoxx 600 index has risen by about 1%, marking its ninth consecutive weekly gain, the longest winning streak since 2012. Most national stock indices have also seen gains, with Italian, German, Spanish, and British stocks rising for eight weeks, seven weeks, three weeks, and two weeks respectively, while French stocks, which rose for two weeks, saw a decline.
Citigroup believes that the increasingly clear expectations of interest rate cuts, gradual improvement in global growth prospects, and the weakening of the US dollar are all positive for European stocks. Manthey stated in the report: &#34;Although the market has experienced a good rally, the current situation suggests that risks are more skewed to the upside, providing support for further gains in the stock market.&#34;
This week, the Bank of England hinted at a possible interest rate cut, while the Swiss National Bank unexpectedly took the first step in cutting interest rates among developed countries, further enhancing market risk sentiment.
However, this rally has also made most market forecasters see limited upside potential for the year-end targets. In a survey conducted by Bloomberg with 16 stock strategists, the average forecast target for the Stoxx 600 index is only 490 points

Citigroup believes that the increasingly clear expectations of interest rate cuts, the gradual improvement in global growth prospects, and the weakening of the US dollar are all positive for European stocks

European stocks have risen for nine consecutive weeks, Citigroup remains bullish: expected to rise another 6% by the end of the year