A report published by a team of strategists at BlackRock says that European shares are set to become winners, as politicians try to revive inflation. It is alleged that investors are rather pessimistic, despite mounting evidence that stocks with growth prospects. The weakening of the euro, improving economic growth worldwide and led a reflection of the United States are key reasons BlackRock strategists to adjust their view on European equities.
Europe earnings in the past were more sensitive to the global economy, compared to US, giving lower margins of European companies and greater exposure to global income and emerging markets.
Investors seem particularly concerned with the sense of political risk posed by the presidential election of France, Germany, the Netherlands and potentially Italy in 2017.
However, strategists from BlackRock believe that investors are too wary of political uncertainty over the European Union and that political risks around the elections in France and Germany are overstated.
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