Investors urge caution on next Europe rally

Leading fund managers are divided over whether investors should participate in equity markets if central banks across Europe provide a further round of stimulus.

With political stalemate in Greece driving a continued flight from risk last week, the ECB and other central banks may have to provide further support. Greece will hold new elections on 17 June after parties were unable to agree on a coalition government following the first round of polling. A combination of Greece’s political impasse, reports of capital flight and ongoing concerns over Spain’s banking system helped drive global equity indices down by 5% last week. Risk assets are likely to remain under pressure in the month building up to the Greek elections, analysts believe, with t...