Bank of America sees 10% further upside for European equities by third-quarter

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European stocks (STOXX) have already bounced back 38% from their March trough at the peak of the COVID-19 financial market crash and a further 10% rise would cover all the losses year-to-date.

The bank is “overweight” on banks and mining stocks, seeing them benefiting the most from a turnaround of the economy. It sees euro area composite Purchasing Managers Index (PMI) new orders rising to 53 in August and 58 in September, from 30 in May.

“While some economic activity will not come back anytime soon, the broad-based lifting of restrictions nonetheless implies scope for a marked pick-up in economic activity,” BofA analysts said in a note to clients.