A calmer political backdrop in Britain and US and an expected return to normality are also set to boost shares next year.
Giles Rothbarth, a BlackRock fund manager, said many European sectors have all the ingredients required for a strong year of earnings upside surprise.
Better virus testing capabilities, a successful vaccine rollout, and a resilient global consumer are just three reasons we think this assumption set is eminently beatable, he said in an annual report of investor views compiled by Edelman Smithfield.
Kirsty Desson, an investment director at Aberdeen Standard Investments, said the recovery and lower political uncertainty in the US meant 2021 was shaping up to be good year for small-cap investors, while Seema Shah, chief strategist at Principal Global investors, said the distribution of the vaccine would be a game-changer.
The eventual return to normal offers Europe the prospect of strong gains, added Ms Shah, while sounding caution on the speed of a vaccine rollout.
Global stocks rallied to fresh record highs as investors cheered receding risks from Brexit and the pandemic. The FTSE 100 closed almost 1pc higher at 6,570 points, while Wall Street also traded higher as agreement on a US stimulus package neared.read more
Brexit deal hopes boost sterling as investors predict 2021 share surge – Telegraph.co.uk
