November 29, 2016 / 9:06 AM / a year ago

SocGen bets growth, inflation will lift global equities in 2017

LONDON, Nov 29 (Reuters) - French investment bank Societe Generale said on Thursday global equity markets are poised for stronger returns in 2017 as a mix of inflation, stronger economic growth and shareholder-friendly policy boosts appetite for stocks.

Societe Generale sees the U.S. S&P 500 at 2,400 by the end of 2017, with Europe’s STOXX 600 at 370 and Japan’s Nikkei at 20,500, implying upside of 9-12 pct.

While the S&P has managed gains of around 8 percent in 2016, the Nikkei and STOXX 600 are down around 4 and 7 percent respectively. But hopes for more fiscal stimulus following the election of Donald Trump as U.S. president support the view that the outlook for growth and inflation should improve in 2017, supporting stocks.

“After a flattish 2016, we expect global equities to deliver higher returns in 2017 thanks to stronger economic growth, higher inflation prints and more active shareholder policies,” strategists at Societe Generale said in a note.

However, political uncertainty in the first half of the year and the potential for protectionist trade policies from the United States are identified as the main risk for global equities.

Soc Gen sees the euro zone Euro Stoxx 50 at 3,300 by the end of 2017, a 9.4 percent rise, Britain’s FTSE 100 at 7,500, a 10.7 percent rise, and Germany’s DAX at 12,000, a 13.6 percent rise. (Reporting by Alistair Smout. Editing by Vikram Subhedar)

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