ABN Amro advises stock caution

ABN Amro is exercising caution in relation to stock markets, particularly those in Europe, warning that a hard landing in the US economy could inflict a significant blow here. In a new report, the broker said that it is wary that European analysts' earnings forecasts for 2001 are too optimistic. Given the probability of significant earnings downgrades this spring, ABN Amro's current recommendation for European equities is buy on weakness rather than buy. The broker has upgraded financial stocks on the basis of an earlier-than-expected peak in interest. But it remains they remain wary of telecommunications, media and technology stocks.