According to preliminary estimates, the Stoxx Europe 600 index could sink 9.1% this year.
Many experts have downgraded their 2022 forecasts for the European stock market due to the energy crisis and high recession risks in the eurozone as well as monetary tightening by the ECB.
In 2022, the Stoxx Europe 600 is projected to plunge by 9.1% to 444 points, Bloomberg reported. It could be the indicator’s worst performance since 2018.
The gloomiest forecasts are made by Goldman Sachs Group Inc. and UBS Group AG. The banks see the European stock market nosediving to the lows unseen since 2008. Back then, the Stoxx Europe 600 lost 46%.
In early summer, the outlook for the European stock market was more optimistic. Yet, the gas crisis and the expectations of a growth slowdown in the eurozone spoiled the picture. UBS strategist Sutanya Chedda sees the year-end target for the Stoxx Europe 600 down by nearly 15% due to high natural gas prices and stagnation risks in the eurozone as well as limited gas supplies from Russia.
Goldman Sachs experts say the index could fall by as much as 20%. At the same time, they expect companies included in the Stoxx Europe 600 to increase their profits by 7%.
Since early 2022, the Stoxx Europe 600 has sunk 12.7%. In June, the index plummeted to an 18-month low. Still, some experts suggest the market may soon hit the bottom. “The next quarter may remain choppy and volatile, but we should not be far from the peak of pessimism,” Societe Generale SA strategist said.
