‘Stocks to fall’ after French election

Regardless of who wins the French election, European stocks are headed for a correction, according to Deutsche Bank. That’s a view at odds with many of the region’s strategists who expect relief if they lose.

The Stoxx Europe 600 Index has rallied 5.2% this year to reach a 16-month high this week amid an improving economic and earnings outlook. That has sent valuations to 5% above Deutsche Bank strategist Andreas Bruckner’s fair value calculation.

Paired with smaller chances of economic data surprises, that means he thinks there’s little upside for the area’s equities even if a loss by the far-right, anti-euro Marine Le Pen removes uncertainty.