Barclays ups year-end targets for Stoxx 600, Stoxx 50 and FTSE 100

Barclays upgraded its year-end targets for the main European indices in its latest equity strategy note.

The bank upped its 2016 end target for the Stoxx 600 to 360 from 340, for the Euro Stoxx 50 to 3,200 from 3,000 and for the FTSE 100 to 7,000 from 6,200.

It lifted its target for France’s CAC 40 to 4,700 from 4,300 and its target for Germany’s DAX to 11,200 from 10,000.

“Scepticism is probably the best reflection of investor sentiment at the moment, with many calling into question the post-Brexit move higher in markets.

"In addition to the recent turn in yields, the three areas of concern appear to be a maturing profits cycle in the US, a sharp slowdown in China and the economic impact of Brexit.”

Barclays said that while it agrees that the risks to the cycle have increased, it is important to note that sentiment, positioning and valuations do not embody the exuberance that characterises the peak of a bull market.

The bank argued that even if the Fed does go ahead and hike interest rates in September, risking a further short-term correction in markets, excess money growth remains supportive of further price-to-earnings multiple expansion.

“Ultimately, if the global economy maintains its post-crisis resilience, valuations could revert higher, in our view.”