HSBC Global Asset Management believes there is a "decent chance" of a global markets rally in Q4, as investors are currently overly pessimistic about the outlook for economic growth.
Philip Poole, global head of macro and investment strategy at the group, says while growth may be "sub-trend", the manager does not anticipate a double dip.
He told Bloomberg a rebound in share trading volumes after the summer and the continued availability of liquidity driven by central banks will also help to boost equities.
"Markets have been too negative and at some point that will reverse," Poole says.
"There is a decent chance of a fourth-quarter rally as going into September, investors focus on the yearend and risk appetite could well pick up."
Poole says Russia is the group's top pick among the largest developing nations, given market valuations and the outlook for commodity prices. He is "neutral" on Chinese stocks, expecting the economic growth in the country to become "more sustainable.
‘Important to have an anchor’
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Lack of innovation for solutions
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