European stocks are poised for a third year of gains, restoring almost all the losses suffered during the financial crisis, as economic growth overcomes record pessimism on earnings.
Equities will rise 12 percent in 2014, according to the average projection of 18 forecasters tracked by Bloomberg News. Ian Scott of Barclays Plc says the Stoxx Europe 600 Index can rally 25 percent because shares are cheap even after a 49 percent gain since 2011. Credit growth and increasing profits will help Siemens AG and Cie. de Saint-Gobain SA spur a 17 percent jump in the region’s stocks, according to Deutsche Bank AG’s Gareth Evans.
The average estimate is the most bullish since at least 2010, with no strategist predicting a gain of less than 3.3 percent, and comes even as company analysts reduced income forecasts for an 85th straight week. While more than 2.7 trillion euros ($3.7 trillion) has been restored to European equity values since September 2011, shares would have to gain another 65 percent to match the advance in the Standard & Poor’s 500 Index during the last five years.
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