Barclays cuts its STOXX 600 target again, says crisis muddying forecasts

Reuters

Mon, Apr 7, 2025, 3:17 AM 1 min read

(Reuters) - Barclays connected Monday chopped its year-end people for Europe’s STOXX 600 scale for the 2nd clip successful nether a period arsenic escalating commercialized tensions and U.S. tariffs fueled recession fears.

The brokerage chopped its people for the European benchmark scale to 490 from 580, but warned that "setting a constituent forecast has small worth astatine this signifier – determination is nary precedent, nor cardinal model to trust connected for this crisis."

European stocks plunged to a 16-month debased connected Monday amid a planetary markets meltdown, arsenic President Donald Trump stood steadfast connected his sweeping tariff plans and investors stake recession risks could punctual a U.S. complaint chopped arsenic aboriginal arsenic May.

Barclays warned the STOXX 600 scale could driblet to 390 points arsenic a worst-case scenario, but could besides rebound to astir 550 if commercialized tensions de-escalated rapidly capable to debar a recession.

The scale past closed astatine 496.33 points connected Friday.

"We deliberation planetary equities are improbable to spell backmost to caller highs anytime soon, arsenic overmuch harm has been done," said Barclays strategists led by Emmanuel Cau.

Cau's forecast comes arsenic planetary brokerages rise their recession hazard forecasts, with J.P.Morgan estimating a 60% accidental of a U.S. and planetary recession, portion Goldman Sachs projecting the likelihood astatine 45%.

Barclays besides turned "overweight" connected UK's benchmark FTSE 100 index, noting that worries astir stagflation could payment the scale owed to its tilt towards antiaircraft stocks, and upgraded the European healthcare assemblage to "market weight", portion trimming its ratings connected diversified financials and leisure sectors to "market weight" and "underweight" respectively.

(Reporting by Joel Jose and Siddarth S successful Bengaluru; Editing by Nivedita Bhattacharjee)