October 31, 2018 / 2:42 PM / in 10 months

Fidelity International CIO: Ready to buy stocks, especially in Europe and EM

* Bulk of market correction over but volatility to stay

* Gone cautious on stocks in Apr, now becoming more constructive

* Suspect China can be next source of risk for financial markets

By Tomo Uetake

TOKYO, Oct 31 (Reuters) - Fidelity International is becoming more constructive on non-U.S. equities, especially European and emerging market shares, as it believes the bulk of market correction is over, Fidelity’s global head of equities said on Wednesday.

“We’re starting to buy the dip at current levels. We think the bulk of the correction is behind us,” Romain Boscher, global chief investment officer for equities, said in an interview with Reuters.

The London-based CIO said Fidelity’s multi-asset portfolio went cautious on stocks as a whole in April, due to an increased possibility of a correction, and its stance is getting more constructive now.

“Now that the market correction did happen, from this level, either for emerging markets or for European assets, we are tempted to progressively re-invest,” said Boscher.

“But we’re remaining vigilant. We think the market will remain (more) volatile than (it) used to be - the volatility is here to stay.”

Although Fidelity International thinks now is the time to buy emerging market stocks including China A-shares, Boscher suspects China could be the next source of risk for global financial markets.

“Major risks are always coming from unexpected events. You cannot be scared by something very well-known and in place, like Brexit or the Italian situation,” he said.

Boscher said he would keep an eye on the Chinese corporate bond market as a potential “canary in the coal mine” for the broader financial markets, although any Chinese derailment is not Fidelity’s main scenario.

Fidelity International had $416.5 billion in assets under management as of June 30. (Reporting by Tomo Uetake Editing by Mark Heinrich)

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