Risks from France’s political upheaval helped trigger a Citigroup Inc. downgrade of European stocks, with its strategists preferring more growth-oriented U.S. equities.
Strategists led by Beata Manthey lowered their view on European shares to neutral from overweight on “heightened political risks” as well as a narrowing market and potential for a further unwind. They upgraded U.S. stocks to overweight from neutral, with technology and industrial shares in focus.
“We upgrade the U.S. due to its substantially higher growth tilt relative to Europe, and more defensive nature in episodes of uncertainty,” the strategists wrote in a note. “Political uncertainty could cool U.S. investors’ recent rotation into European equities for the time being.”
French President Emmanuel Macron’s shock announcement of a snap election last week sparked a rout that wiped off about US$258 billion from the market capitalization of…
