Europe's car stocks rally as BAML backs autos as "contrarian" buy
LONDON, March 19 (Reuters) - Europe's autos and suppliersindex .SXAP climbed 2.4 percent on Tuesday after Bank ofAmerica Merrill Lynch analysts recommended contrarian investorsbuy select carmakers after a survey showed investors grew morebearish on the sector.
Autos fell to the 15th most favoured sector out of 19European sectors, from 8th in February, BAML's March fundmanager survey found.
But this pessimism on the sector combined with valuationsnear all-time lows make for a "very compelling" contrarianargument for buying European carmakers, according to BAMLanalysts.
The STOXX 600 autos & suppliers sector index .SXAP sank 28percent in 2018, but has had a strong start to 2019 - up about14.3 percent year-to-date. On Tuesday, it was the bestperforming sector in Europe and set for its best day in a month.
BAML's top picks are Daimler DAIGn.DE , VW VOWG_p.DE ,PorschePSHG_p.DE , and Peugeot owner PSAPEUP.PA .
The auto analysts said they are more cautious on suppliersbut remain positive on tyre stocks, preferring ContinentalCONG.DE over ValeoVLOF.PA .
(Reporting by Helen Reid, Editing by Josephine Mason) ((Helen.Reid@thomsonreuters.com; +44 20 7542 0402;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.