Germany's stocks should be a safe haven within the euro zone amidst forthcoming political uncertainty and could even thrive if the anti-immigration and far-right French presidential candidate Marine Le Pen secured election victory in May, according to JPMorgan strategists.
"We believe that German equities will be a relative safe haven with euro zone into the election if uncertainty remains, and a clear winner in the case of a Le Pen win," JPMorgan's analysts said in a note. "German stocks strongly outperformed the rest of the region during the sovereign crisis of '11, when the euro collapsed and peripheral spreads blew up."
Investors appear to be increasingly nervous ahead of the scheduled elections in the Netherlands, France and Germany after failing to foresee the outcomes of the U.K.'s Brexit vote and U.S. President Donald Trump's victory.
A particular impending political risk surrounds the prospects of France's Marine Le Pen. The National Front leader currently leads in the latest opinion polls and has promised to renegotiate the terms of France's membership of the European Union if elected president, though ultimately her chances of success appear limited.
Reflation reboot
Further to this, Germany's stocks should continue to benefit from rising inflation and an improving economy in spite of the numerous elections scheduled over the coming months.
"Germany is a beneficiary of the global reflation trade, which we think has legs," a team of equity strategists at JPMorgan said in a note.
Strategists at Wall Street's biggest bank pointed to the recent strength in global economic data as reason for investors to feel encouraged by German stocks.
Growth in the euro zone's business activity surged in February to its highest level in almost six years, according to the latest survey of the services and manufacturing sectors by IHS Markit published Tuesday.
Meanwhile, Germany's composite PMI (Purchasing Managers' Index) rocketed up to of 56.1 in February and hit a new three-year high. The flash PMI report for Germany was up from January's four-month low of 54.8.
Follow CNBC International on Twitter and Facebook.