[LONDON] Goldman Sachs cut its forecasts for European and UK equity benchmarks citing sluggish global growth, a stronger euro and weaker-than-expected commodity prices.
Goldman reduced its 12-month target on the pan-European STOXX 600 index to 345 points from 380, a reduction of around 9 per cent.
The Wall Street bank now sees 2016 earnings per share for the STOXX 600 falling 2 per cent. It had earlier forecast a growth of 4 per cent. "Our 2016 EPS downgrade is a function of a weaker global outlook, a more Dovish Fed (stronger euro, lower risk-free rate) and weaker commodity prices than we forecast," Goldman wrote in a note.
Goldman cut its 12-month target on Britain's benchmark FTSE 100 index to 6,300 points from 6,550 points, and reduced its 12-month target on the euro zone's Euro STOXX 50 index to 3,070 from 3,500.