Pharma and food shares favoured over tech by Europe's top market investors
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Big European stock market investors have dialled down their fears of a recession, but still favour pharma and food shares over tech amid concerns over interest rate hikes, the latest Bank of America survey of fund managers has revealed.
The European fund managers have decided stock market sector picks on companies from Ireland to Greece on the basis of the prospects for a "soft landing" for the European economy, according to the survey.
However, ongoing fears over interest rates mean the top investors favour so-called defensive stocks and are less attracted to tech shares, which typically thrive in periods of low inflation and strong economic growth.
"Tech loses the spot as the largest sector overweight in Europe to pharma, with utilities and food and beverages completing a strong defensive shift in the top four overweight positions," according to the BofA survey.
Property shares will likely remain out of favour.
"Real estate remains the most disliked sector, now followed by mining, while banks are in mild underweight territory," the survey found.
"Among European countries, France remains the most popular overweight, followed by Switzerland, while Italy and Spain are the least preferred," the survey found. Only a small number of fund managers predicted the European economy could "rebound further" as energy price inflation fades.