Equity markets will stagnate in the best case scenario
Corresponding to a less panic-driven view on markets, confidence started to recover across the board. In its latest release, the ZEW indicator for the region even turned positive on economic outlook, allowing equity markets to front-run the expected economic recovery, which however, has to come true sooner than later.
“However, without reliable signs of fundamental improvement, equity markets should hover around a sideways trend - in the best case”, Erste analysts say.
Since the cleaning up of an oversold situation has been the main driver, previously strongly sold markets and sectors performed the best in the recent market upswing.
Emerging European stocks, which had been oversold, outperformed all other geographic regions by a significant margin.
Meanwhile, ‘safer havens’ like the US, UK and Western European stocks underperformed in this rally.
“However, without reliable signs of fundamental improvement, equity markets should hover around a sideways trend - in the best case”, Erste analysts say.
Since the cleaning up of an oversold situation has been the main driver, previously strongly sold markets and sectors performed the best in the recent market upswing.
Emerging European stocks, which had been oversold, outperformed all other geographic regions by a significant margin.
Meanwhile, ‘safer havens’ like the US, UK and Western European stocks underperformed in this rally.