HSBC says European equity funds appear to be rotating out of France and into the UK as concerns over France's fiscal outlook weigh on investor sentiment. The broker recently cut France to "underweight," citing a worsening fiscal backdrop, weaker economic forecasts and deteriorating analyst expectations, according to a Sept. 23 report. HSBC also recently raised its year-end target for the STOXX 600 to 680, pointing to a growing shift by European companies towards their domestic markets. Global equities, measured by the FTSE All-World index, rose 2.4% in the third quarter of 2026 so far, and the fourth quarter has historically been the strongest period for both equity fund flows and market performance. HSBC remains "overweight" technology, which has the strongest earnings growth outlook in Europe for 2027 with consensus forecasts pointing to 27% growth, and stays "neutral" on healthcare, where consensus forecasts call for earnings growth of 5% in 2026 and about 9% in 2027. HSBC's economists expect the European Central Bank to raise interest rates twice, in December and February, which could continue to support financial stocks.
HSBC Holdings PLCHSBC is the broker making the France underweight/UK rotation call and STOXX 600 target change, but the impact on HSBC itself is unclear.
NVIDIA Corporation
