Upside in European cyclicals but no buying yet - BofA survey
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UPSIDE IN EUROPEAN CYCLICALS BUT NO BUYING YET - BOFA SURVEY
A net 53% of European fund managers who responded to a BofA survey see upside for European cyclicals relative to defensives, up strongly from a month ago on hopes of a pick-up in global growth. But beyond financial stocks, they don't seem to be buying much yet.
When it comes to sectors, investors said they were most overweight utilities, with healthcare making it into the top five, both typically seen as defensives.
In contrast, BofA say, "Cyclicals still dominate the underweights, with autos remaining the least preferred sector, followed by retail and chemicals."
Banks, a cyclical sector, are bucking that trend, given that they are second on the overweight chart.
It could be a case of investorswaiting to buy. Even if you see some upside for European autos, past form suggests no harm in waiting a bit longer to stock up. The STOXX auto sector is down nearly 12% this year. .SXAP
In terms of national breakdowns, there is less of a contradiction. Spain, where growth is holding up well, is the most preferred equity market in Europe, while France, where the government's finances have unleashed a political crisis, is the most underweight.
(Alun John)
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