The European market will continue to be volatile in 2003 but there will be room for real improvement according to Govett Investments.
The fund manager says the EU economy will remain reliant on US developments and the recent package of tax breaks in the US will trickle down to impact upon European markets in due course.
Govett European strategy fund manager Peter Kysel says while the stock picking environment will continue to be challenging he expects to move from defensive sectors to more economic sensitive ones in the coming months.
Govett European strategy fund manager Peter Kysel says: “Our strategy for Europe is still a cautious one, particularly with the short term concern over the situation in the Middle East. We do not consider valuations to be cheap as earnings and profits continue to fall, yet we expect the European Central Bank to be less rigid in the management of interest in 2003 and are confident that lower interest rates will lead to some sort of recovery in consumer and business sentiment.”