Stress tests a positive for European equities

ON EUROPE

OLLY RUSS, manager of the Ignis Argonaut European Income fund on Europe

The market’s positive reaction to the European bank stress tests and the stabilisation in sovereign debt markets could point to a sustainable recovery in European equities. A recent Spanish debt auction was well-subscribed, and the Greek Government has reported its austerity package seems to be working, with the deficit reduction apparently ahead of schedule and the IMF and ECB satisfied with progress so far. The ECB has stopped its emergency purchases of peripheral sovereign debt, and the market in these securities seems to have returned to some degree of normality.Corporate earnings...