• According to predictions by Morgan Stanley, top European stocks may lose their value in summer by over 10%.
  • The drop is most likely to happen owing to the continued decline in economic growth and deteriorating liquidity in the European Zone.

Morgan Stanley expects a significant price fall in top European stocks

Morgan Stanley has predicted that the top European stocks may fall by over 10% this summer as a harsh economic season grapples the Euro Zone. Morgan Stanley has already cut its sector rating on financial to neutral in favour of Pharmaceuticals.

According to Morgan Stanley, European companies have held up better than others in the rest of the world in 2023 despite facing more challenging economic times. However, they haven’t gone unimpacted as their profits this year are set to decline to 6%, which is still higher than the estimated 10%.

“We still expect a down cycle from the second half of 2023 onwards due to declining margins and slowing economic growth (which we believe is only just beginning),” said Graham Secker, head of European equity strategy at Morgan Stanley.

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