European shares are set for modest gains for the rest of the year, a Reuters poll found, weighed by the Iran war and a lack of popular AI stocks.
The STOXX 600 is expected to end the year at 645 points, up 2.6% from current levels. The euro zone blue chip index is predicted to rise a little over 2%.
Most of the index's 6.1% gain this year came before the US-Israel war with Iran. Hopes of reopening the Strait of Hormuz have helped markets recover.
European companies brace for earnings hits. The ECB is expected to raise rates to curb energy price inflation.
Analysts see European stocks as more vulnerable. Jörn Spillmann cites Iran war, monetary policy, and Q2 earnings as key topics.
Longer-term, the STOXX 600 is expected to grind higher: 670 by mid-2027 and 694 by end-2027.
Europe lacks AI stock exposure. The S&P 500 is up 9%, Asian shares 22%. European tech stocks are up 20% but only 10% of the STOXX 600.
Britain's FTSE 100 is seen at 10,700 by year-end. Germany's DAX could reach 25,600.
