European stocks are preparing to continue their upward trajectory, ignoring trade and geopolitical tensions, provided the economic outlook remains positive, according to a Bloomberg survey.
Strategists expect the European Stoxx 600 index to rise by about 4% to 626 points by the end of the year, amid positive expectations supported by increased profits and flexible monetary policies, in addition to accelerating the pace of financial spending.
Major companies such as Goldman Sachs and HSBC have raised their target levels for the index, with HSBC expecting to reach a high optimistic level of 670 points, which means a potential increase of about 11%.
In this context, Jerry Foler, head of European equity strategy at UBS, stated: “With the start of injecting incentives into the infrastructure sector, it seems that the acceleration of growth in Europe is imminent, and the Stoxx 600 index is expected to reach 650 points supported by profit growth.”
Investors are particularly benefiting from cyclical and value stocks, which include the financial, utilities, transportation, retail, healthcare equipment, and technology sectors, while analysts tend to be cautious towards the automotive, chemical, food, beverage, and tobacco sectors.
The Stoxx 600 index has risen by about 3% since the beginning of this year, after achieving gains of about 17% in 2025, led by the semiconductor, defense, and mining sectors, while the consumer goods sector performed weaker.
This optimism is based on significant financial support, including investments exceeding $2.3 trillion in the networks and clean energy sectors, the German infrastructure fund worth 500 billion euros, in addition to increasing commitments in the field of defense.
Despite valuations rising to their highest levels in four years, investors remain optimistic, as a survey of investment fund managers showed that 95% of them expect European stocks to rise during the next 12 months, with cash levels falling to their lowest levels in 12 years.
Experts confirmed that the recovery of economic growth in Europe, in addition to diversifying portfolios away from US assets, supports the performance of European stocks and emerging markets alike, with expectations that this trend will continue during 2026.
