Barclays Eyes Sharp Europe 50 Relief Rally if Iran Conflict Eases

Barclays now forecasts a sharp relief rally in European equities if the Iran conflict resolves quickly, but warns of significant downside if the Strait of Hormuz remains closed. The latest view caps a volatile period that began with Morgan Stanley lifting its MSCI Europe target to 2,700 on May 13 and UBS praising energy cash flows. Subsequent notes from Danske Bank and BofA highlighted defensive rotations and growth downgrades, while AI-compute stocks drove two-thirds of STOXX Europe 600 gains, leaving Europe 50 at 614.38 despite rising oil-price risks.