Stocks in Europe still have room to push higher in the next few years despite a series of political pressures weighing on sentiment in the region, equity analysts told CNBC.
“Core Europe remains one of the preferred markets for us and one we believe offers attractive opportunities for investors over a multi-year time period,” Jeff Donlon, managing director of global strategies at investment management firm Manning & Napier, told CNBC via email.
Improved fundamentals and attractive valuations for stocks are seen as key reasons why investors should continue to focus on the continent. This despite an uncertain outcome from the German elections, where Chancellor Angela Merkel saw her government weakened slightly, and despite constant fears over the outcome of Brexit.
“We sense that Brexit gas actually caused the EU to unify rather than pull apart,” Donlon said. “We believe the narrative following the German election and what it means for further EU unity and integration has gotten a bit too bearish,” he added.