LIVE MARKETS-JPM flags upside potential for euro zone buybacks

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JPM FLAGS UPSIDE POTENTIAL FOR EURO ZONE BUYBACKS

J.P.Morgan strategist Mislav Matejka sees euro zone equities setting up for a stronger 2026, with corporate buybacks likely to recover after a period of stagnation.

While buyback volumes have stalled in recent quarters, yields remain elevated, and JPM expects a turn in earnings to unlock fresh repurchase activity.

This year's earnings backdrop has been weak but fiscal stimulus is expected to become more tangible next year, supporting a break higher in both earnings and buybacks.

That could help reignite interest in the bloc's stock market, which has lagged Wall Street for about 7-8 months, with the euro STOXX 50 index .STOXX50E stuck near 5,400 points.

"We think this consolidation is healthy, and it could soon be time to add again to Eurozone," writes Matejka.

"The potential turn up in earnings & buybacks could be one of the supports for the more positive Eurozone stance entering next year, once the current consolidation runs its course".

Financials have been the key buyback driver in the region, accounting for 30% of the total in H1 2025, followed by energy (14%) and healthcare (13%).

(Danilo Masoni)

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