Eurozone stocks are set for their best week in two months as investors continue to pump cash into the region’s equity markets.
The Euro Stoxx 50 index of the eurozone’s largest companies is up 2 per cent this week, while the broader Stoxx 600 that includes non-eurozone companies has gained 1.6 per cent, putting them both on track for the best week since the start of May.
This comes as eurozone equity ETFs racked up their 22nd consecutive week of inflows, raking in $220m this week and $22.3bn so far this year, according to Markit data.
The strengthening of the eurozone economy is likely to be reflected in another strong quarter of earnings for the region’s companies.
“The recent positive trend of earnings expectations has been a key bull trend over the last few months,” says Andreas Hürkamp at Commerzbank.
He expects this momentum to continue, with 2017 earnings per share forecasts rising 4.3 per cent for companies listed on Germany’s DAX Index, and 0.8 per cent for Stoxx 50 companies.