The STOXX 600, an index following some of Europe’s largest stocks, is set to remain at the same level throughout 2023, according to Citigroup.
The US bank dropped its full-year targets for the index from 475 to 445 as well as reducing its FTSE 100 forecasts by 5%.
The European index, which is run by Deutsche Börse (ETR:DB1)’s subsidiary Qontigo, opened at 446 this morning.
Citi claimed the cutback of targets was “to reflect downside risks to growth and a volatile market environment”.
The investment bank also downgraded its outlook for the European banking sector from ‘overweight' to 'neutral’ – citing the rapid increase in interest rates as the driving force.
STOXX 600 lost almost 4% of its value in the last month, largely due to the falls of its 40 bank constituents – which includes Credit Suisse.
However, it isn’t just the failed Swiss bank’s 71% loss of value that is weighing the index down.
Luxembourg-based real estate firm Aroundtown has seen 32% of its value wiped in the last month, with the UK supermarket deliverer Ocado also shedding more than 30% of its price.
UK stocks make up the majority of the index with more than 180 British-based components - including the six largest UK banks.
Some of the biggest fallers in the index today include the Swedish bank Svenska Handelsbanken (down 9.8%) and UK-based car dealer Inchcape (down 12.8% on results).