Cheap valuations, as well as fiscal and monetary stimulus from European authorities, could see stocks in the region rallying further, a strategist told CNBC on Friday.
"I think all of Europe is looking pretty attractive as an asset class," said Seema Shah, chief strategist of Principal Global Investors. "They've really underperformed this year, and valuation-wise they certainly look more attractive than the United States."
Shah, however, said European assets remain "very under owned" at this point. "There's room for it to rally," she told CNBC's "Capital Connection."
She also pointed to stimulus measures from the European Central Bank and fiscal policy taken by local governments. The ECB on Thursday increased its Pandemic Emergency Purchase Programme by 600 billion euros ($672 billion) to a total of 1.35 trillion euros.
"The fiscal side has really been where there has been a lot of upward surprise," she added. "It does suggest that actually European equities across a lot of those countries could start to perform a bit of a catch-up against the U.S."
Suresh Tantia, a senior investment strategist at Credit Suisse's Asia-Pacific CIO Office, agreed that fiscal support would be good for markets, especially in Germany.
He said the German market had been "beaten down substantially," but that stimulus from the typically austere country is a positive. Berlin on Wednesday announced a 130 billion euro package to help economic recovery.
"I think that opens a new door for the German economy to support the companies," Tantia told "Capital Connection" on Thursday. "That will provide a push to German equity markets."
— CNBC's Silvia Amaro contributed to this report.