A double dip recession is unlikely as central banks are going to continue to pump cash into the markets to boost growth, Nigel Bolton, Blackrock European Equity Style Diversified team head, told CNBC.
European stocks are under-owned and macro factors, including improved sentiment around the Greek debt crisis, look positive for the continent's corporates, according to Bolton.
"I think it's back to a much more stock-specific market, that's where you need to focus on," Bolton told CNBC. "We still see some real good opportunities in some of the industrials and some of the consumer discretionaries."
"I think across the sectors, when I look at our portfolios at Blackrock, we're probably the least overweight and underweight than we have been for several years, and it's now back to stock specifics – those companies that are going to generate good earnings growth, have a reasonable top line in a fairly ho-hum macroeconomic environment," Bolton said.
While he does not see a strong return to growth, Bolton does not foresee a double dip recession.
"We're coming to an end of QE2 in the US and I think with the data softening… I think there is an increasing likelihood that we're going to get another stimulus package of some sort," he said.
"I think that's what's underpinning the global scene is, that the central banks, probably with the exception of the ECB… have basically said that we are going to provide sufficient liquidity and sufficient monetary injections to stimulate and keep growth going, so that gives me great confidence that we're not going to fall back into a double dip recession," Bolton said.
Earnings are going to be squeezed as the global environment continues to be difficult, Bolton said, which is why the market in Europe is now ripe for stock pickers.
"If you look at the forward-looking, 12 month consensus figures for earnings in Europe, it's actually only 11 percent, so it has come down quite a bit over the last four or five months… in terms of profit margins you have to be careful, and that's why I say it’s back to a stockpicking, stockpicker's market."
"It means doing your research, doing your homework and making sure your companies are going to be able to grow earnings in a much tougher environment," he said.