Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

HSBC upgrades UK stocks, downgrades Canada

Published 05/22/2024, 11:02 PM
© Reuters.

HSBC downgraded Canadian equities to Underweight from Neutral and lifted UK equities to Neutral from Underweight in a note Wednesday. They also upgraded developed Asia, excluding Japan, to overweight from Neutral.

The bank told investors that equities in Canada and Japan, alongside Financials and Health Care, look less attractive according to their analysis model.

Meanwhile, the UK is seen as providing "a good and cheap source of defensive, commodity and yield exposure," which the bank feels could come in handy as we head into a more volatile second half of the year.

Canada's decline in in HSBC's eyes is driven by weak earnings momentum and its machine learning model assessment that the market has overshot what is implied by macro fundamentals over the last three months.

The bank also remains Underweight Europe, excluding the UK, as it believes European equities are grappling with a tougher economic backdrop compared to the US.

"Despite sluggish macro data and negative earnings revisions, European equities have rallied due to, what we would argue is, an unsustainable re-rating in valuations," said HSBC.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.