S&P Capital IQ’s equity research team has also pointed to reflation suggesting rising private equity valuations which "does not necessarily assume a straight path."
However, the research believes these issues are short term and forecasts that by the end of 2013 returns of 6.9% from current levels are to be expected, with Earnings Per Share growth forecasts for this year and 2014 standing at 2% and 8 cent respectively.
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S&P Capital IQ Equity Research chief European equity strategist, Robert Quinn, said: "The driver of the rally over recent quarters has not been the expected improvement in growth, with subsequent earnings and rising bond yields, but equities being the least ugly return proposition."
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