Hermes Sourcecap chief executive Andrew Parry remains unconvinced by the turnaround in sentiment on Europe and says eurozone growth next year is not an “automatic outcome”.
Parry notes the positive sentiment stemming from European growth figures earlier this month, which showed Eurozone GDP rose 0.3 per cent in Q2.
But he says: “When you step back and look at the progression of sentiment it is quite remarkable. However, it is an open question if we can take this into 2014 yet. We have to be cautious that it is not an automatic outcome that growth will be strong in 2014.
“The litmus test is if companies are reporting higher sales and profits. At the moment we have not seen enough of this.”
Hargreaves Lansdown senior analyst Meera Hearnden says: “There is a case for saying market has gotten ahead of itself without looking at fundamentals.
“It would be sensible to say there would be a correction before another rise. We are going to need to see a combination of things, such as positive manufacturing and employment figures, before we are convinced on Europe.”