American Bank Raises Stoxx 600 Target 6% to 530 Points Despite Geopolitical Tensions

American Bank has raised its year-end target for the Stoxx 600 index from 500 to 530 points, citing resilience in global growth despite ongoing trade tensions and geopolitical conflicts. The bank's global research department made this announcement on Friday, highlighting that the European stock market remains near historical highs despite escalating tensions from the global trade war and the Israel-Iran conflict.

The bank attributes the market's resilience to the fact that these geopolitical events have not yet significantly impacted global growth. However, the bank maintains a "negative" stance on the European stock market, indicating a cautious outlook. The current target for the pan-European benchmark index is still about 1.1% lower than its closing price of 535.86 points on Thursday.

While the partial trade agreement between the United States and China, along with the mild inflation report from the United States in May, has provided some relief to financial markets, the bank warns that tariff pressures and escalating tensions in the Middle East could continue to weigh on global economic growth. The bank has upgraded its rating for the European mining sector from "in line with the market" to "overweight," citing attractive valuations and support from a weaker dollar following the sector's significant underperformance.

Conversely, the bank has downgraded its rating for the aviation sector from "in line with the market" to "underweight," citing the risk of rising oil prices due to potential escalations in Middle East tensions. The bank's revised target for the Stoxx 600 index reflects a balanced view of the current market environment, taking into account both the risks and opportunities present.