March 22 Reuters Citigroup raised its 2024 yearend target for the STOXX 600 index by about 6 to 540 from 510, citing more clarity on the Federal Reserve39;s interest rate trajectory and potential weakness in the U.S. dollar.

The brokerage39;s target for the panEuropean benchmark index also implied a nearly 6 upside to its Thursday close.

European equities tend to trade higher around rate cutting cycles, the Wall Street brokerage said in the note dated Thursday.

This week39;s Fed meeting reduces some higherforlonger risks, with cuts appearing firmly on the table, Citi added.

The Fed on Wednesday left interest rates unchanged and stuck to its view of three interest rate cuts this year.

Citi also lifted its 2024 forecast for the earningspershare of European stocks to 6 from the previous 3, on the back of likely improvement in global economic growth.

The brokerage sees weakness in the U.S. dollar in the second quarter of 2024. A weaker dollar should be supportive of European and exUS equities, it added.

Reporting by Gokul Pisharody in Bengaluru; Editing by Varun H K and Sohini Goswami

Source Reuters