European Stocks Eke Out Yearly Gain Amid Trade, Politics Worries

As 2024 comes to a close, European equity markets in the UK and France have shown slight improvements amid thin trading conditions. This upward movement has helped the European benchmark to finish the year with modest gains.

Market Performance Highlights

Both the UK’s FTSE 100 and France’s CAC 40 Index increased by 0.3% as of 10:18 a.m. London time. On this trading day, volumes were significantly lower, approximately 63% less than the average for the last 30 days for the FTSE 100, and even lower—by about 80%—for the CAC 40. Meanwhile, stock exchanges in Germany, Italy, Denmark, Switzerland, and Finland were closed.

Individual Stock Movements

Among the notable performances was Wizz Air Holdings Plc, whose shares climbed after the airline announced its expectations of a return to growth in the full year of 2026. In contrast, Galp Energia SGPS experienced a drop in its stock price following updates on its drilling operations in Namibia.

Yearly Overview of European Equities

Looking back at 2024, European equities achieved a gain of just 5.6%. This performance lags significantly behind the average growth of 16% seen in positive years since the benchmark’s inception in 1998. To compare, the S&P 500 Index in the United States has experienced a remarkable surge of 24%, largely attributed to its heavier focus on high-growth technology companies.

Trade and Political Concerns

The outlook for European stocks has been clouded by fears of potential trade tariffs from US President-elect Donald Trump, especially impacting companies with ties to China. Additionally, political instability in France and Germany has contributed to a pessimistic mood among investors this year.

Outlook for 2025

Despite the challenges faced in 2024, some analysts remain hopeful for a better performance in 2025. Morningstar strategist Michael Field expressed optimism, stating that the macroeconomic outlook is improving and that expectations for European stocks are relatively low, which could create opportunities for growth.

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