Time to invest in European banks, says BoA Merrill Lynch

Bank of America Merrill Lynch thinks Europe's financials are currently presenting an investment opportunity not to be missed.

With European data continuing to surprise the markets, Gary Baker head of European equity strategy at Bank of America Merrill Lynch thinks that now is the time to get back into European banking stocks, saying ‘bank equity could double’.

‘Previously the main route to performance was to be underweight banks,' Baker said. But now he thinks the tables have turned and said ‘there is now a risk of being left out of this.’

He continued: 'European markets have seen extraordinary news flow; there has been a full blown sovereign debt crisis and doubts over the structure of the European Union but the markets are flat.’

Speaking at the firm's mid-year macro update, he said banks are looking attractive despite the tumultuous backdrop.

‘The snapshot of data we have seen is acting in isolation to the mood music,’ he said.

The bank predicts an orderly slow-down in Europe but ‘no double dip’.