Morgan Stanley turns defensive on European banks, keeps faith with Barclays and Lloyds

Morgan Stanley has adopted a more cautious stance on European banks following its annual financials conference, warning that geopolitical uncertainty around the Middle East conflict is likely to weigh on sector valuations even as underlying earnings remain resilient. The US investment bank upgraded Santander to 'overweight' and named it a top pick, while downgrading ING Groep to 'equal-weight' and removing Societe Generale from its top picks list.