HSBC raises 2026 year-end Stoxx 600 index PT to 680 (prev. 670), FTSE 100 PT to 11,390 (prev. 10,980)

House-level target revisions of this size, low single digits on the index, are routine mark-to-forecast exercises rather than directional calls; what carries the information is the relative country tilts underneath. A simultaneous upgrade of Italy and downgrade of France is the more telling element, given the two markets have traded as a political-risk pair: episodes of French fiscal and political stress have historically widened the OAT-Bund spread and pushed allocators toward Italy as the alternative large eurozone weight, a rotation that has recurred whenever French deficit trajectory questions resurface. The call therefore reads as a continuation of the convergence trade, Italian spreads versus French, expressed in equity weights rather than rates. The tells are whether other houses follow on the France underweight, whether the OAT-Bund spread validates the stance, and whether French domestic flows, which have historically been a stabilising bid in CAC-heavy names, hold. Sector composition matters: Italy's index is bank-dominated, so the overweight is partly a carry and buyback story, while France's luxury and industrial weights make it more sensitive to external demand than to domestic politics alone.