(Reuters) – Goldman Sachs on Friday cut its target for Europe’s major stock index, saying equities in the region are likely to face risks for some time as the Russia-Ukraine crisis intensifies.
Missiles pounded the Ukrainian capital on Friday as Russian forces pressed their advance and Ukrainian President Volodymyr Zelenskiy pleaded with the international community to do more, saying sanctions announced so far were not enough.
The United States, Britain, Japan, Canada, Australia and the European Union unveiled more sanctions on Moscow on top of penalties announced earlier this week, including a move by Germany to halt an $11 billion gas pipeline from Russia.
“In light of the conflict, the rise in risk aversion – some of which will likely linger – and the impact on the growth/inflation mix, we take down our target prices,” Goldman Sachs economist Sharon Bell said.
Bell now expects the pan-European STOXX 600 index to hit 490, down from the earlier 12-month target of 530.
The index closed at 438.96 on Thursday as European stocks dived to nine-month lows after Russia invaded Ukraine. [.EU]
The brokerage, however, raised its forecast for London’s FTSE 100 to 8,100 from 7,900, saying it is a good value opportunity with almost no exposure to the technology sector.
“FTSE 100 (UKX) has proven more resilient both to rate rises and concerns about escalating energy costs,” Bell said.
The index closed at 7,207.38 on Thursday. [.L]
(Reporting by Tanvi Mehta in Bengaluru; Editing by Subhranshu Sahu)
