Barclays closes out 'underweight' on FTSE 250, domestic medium-cap stocks

Analysts at Barclays Research closed their 'underweight' recommendation on the FTSE 250 and medium-capitalisation/domestic stocks, arguing that the then current valuation multiples offered "good" risk-reward.

Nevertheless, within the UK, for which they remained overall 'overweight', they expressed a continued preference for large capitalisation stocks and the FSTE 100, despite its large outperformance year-to-date.

Stepping back, they were agnostic if asked to choose between the US and Europe, labelling themselves neutral.

They expected both to continue trading in a relatively tight range, with Europe said to face bigger macro risks and to be more valuable to a possible decision by Moscow to cut off Russian gas.

Yet Europe was "much cheaper" than the US and positioning was "very bearish".

Their preference in Europe was for Italy and Germany, although they noted that, aside from Spain, the dispersion between European Monetary Union countries had narrowed during the recent sell-off.