Goldman Sachs downgraded European banks to "neutral" from "overweight" in its outlook for next year, following a strong performance in the sector, but it continues to favor large global retail banks, Reuters reported Thursday.
The insurance sector was downgraded to "underweight" as it faces structural issues while an "overweight" rating on oil and gas and basic resources was maintained.
Commodities and the BRICs (Brazil, Russian, India and China) are two areas of sustainable growth, Goldman Sachs wrote in its 2010 outlook note.
The investment bank recommends short positions in food products, general retail stocks and hospitality and leisure stocks, while investors should be going long on tobacco, beverages and steel.
Next year may mark the transition to a "growth"-driven market phase from a "hope"-driven one, the Goldman Sachs research showed.