Debt Woes No Drag for Europe Stocks as Rally Forecast

European equities will climb 12 percent through the end of next year, beating 2010’s gains, as rising earnings and record-low interest rates help companies overcome the sovereign-debt crisis, a Bloomberg survey of 13 strategists shows.

Goldman Sachs Group Inc., the most bullish forecaster, says the Stoxx Europe 600 Index will rally 20 percent because profits may expand twice as fast as the 14 percent average rate in more than 26,000 analyst estimates compiled by Bloomberg. Bayerische Motoren Werke AG and WPP Plc, the world’s biggest advertising company, may boost income by an average 18 percent next year, according to data compiled by Bloomberg.