LONDON, Nov 11 (Reuters) - Bank of America Merrill Lynch (BAML) on Friday downgraded its rating on European miners to “neutral” saying that a recent strong rally had made the sector “overbought”.
The bank upgraded its stance on the European technology firms to “neutral” from “underweight”, saying that the sector’s valuations and positioning were now less “stretched”.
The STOXX Europe 600 Basic Resources index surged more than 10 percent, before paring some gains, on expectations that U.S. President-elect Donald Trump will keep his election promise to spend $1 trillion on infrastructure over a decade.
“The election fall out has driven the reflation trade to new highs,” BAML analysts said in a note. “Cyclicals vs Defensives are now very overbought by historical standards.” (Reporting by Atul Prakash)