In 2024, the European stock market found it difficult to keep up with the rest of the Old Continent’s stock markets, due to the burden that the behavior of the French market was causing. But the continental index has decided to follow the motto new year, new life and, for now, it is bearing fruit.
The behavior of the French companies present in the index weighed down the general performance of the EuroStoxx 50 in 2024. It should be remembered that the political and economic instability in France, added to the weakness of the economy in China, which damaged French luxury companies (also present in the EuroStoxx, where they have a significant weight) ended up leading the Parisian index to close last year with a fall of 2.1%. These setbacks also represented an obstacle for the continental selective that had to resign with an increase of 8.3% in 2024, while the rest of the main stock markets on the Old Continent advanced by double digits.
But now the index is recovering lost ground. In the few three weeks that 2025 accumulates, the EuroStoxx 50 advances a little more than 5% and returns to the maximum levels of the year 2000. This rise makes it, in fact, one of the most bullish selective among the main ones in the world, surpassing, for the moment, the behavior of Wall Street (the S&P 500 achieves increases of around 2%, after advancing somewhat more in 2024 of 23%). Only the Italian stock market currently exceeds the performance of the continental selective, with an increase of 5.6%. For its part, the Ibex 35 lags behind the rest and is at the bottom of European increases, with a revaluation of 2.7%.
The counterproductive part of the advances of the European index? This is eat more than 70% of the expected profitability expected for 2025. At the end of last year, experts expected the continental index to close the current year with increases of 7.4% (calculated through the inverse of the PER, times the profit is reflected in the share price). After the gains already achieved, this would mean that the EuroStoxx would only have to register slight increases of 1% in the remaining 11 months of the year. The key will be how the benefits evolve.
Now, the European selective is heading towards 5,200 points, after surpassing the maximums achieved in 2024, something that, at a technical level, Joan Cabrero, Ecotrader advisor, is not surprised: “The main European reference still had pending tasks to complete. 2025. The objective was clear: take the EuroStoxx 50 to the zone of historical maximums reached during the technological bubble of the year 2000, located at 5,500 points.“.
Cabrero explains that, as long as the EuroStoxx 50 does not lose the lows it set at the end of last year, between 4,800 and 4,688 points, “there are no reasons to reduce exposure to the European stock market.” In fact, in this scenario he recommends using the accordion technique: “Increase when the wind is in your favor to decrease when there is turbulence. In this way, when everything is going well you win with a large position and when things go wrong you lose. with a smaller position. With the resistance overcome, it would now be time to increase positions in the European stock markets.”
The firms that support the index
If this start to 2025 has stood out for anything, it has once again been because of monetary policy. At the end of 2024, markets indicated that the European Central Bank (ECB) would accelerate the pace of the rate cuts that began last summer and this year it would make five additional cuts, of 25 basis points each. However, the latest rise in inflation in the euro zone, together with the CPI forecasts for the future, has erased one of these decreases and now the deposit facility rates would remain at 2% at the end of 2025compared to the previous 1.75%.
Banks remain the main beneficiaries and, although it has been more than assumed that the record profits are behind us, the higher rates remain, the more they will be able to continue to prolong their interest income.
Thus it is understood that among the ten main companies that have been supporting the rise of the EuroStoxx 50 these weeks until four of them are banking entities, two of them Spanish: Unicredit, BBVA, Banco Santander and Intesa Sanpaolo.
Once again, Unicredit is at the top of the EuroStoxx 50 stock market gains. The Italian financial institution (which is also one of the securities of Tressis Eco30 Walletthe investment fund advised by elEconomista.es) is noted a revaluation of 11.7% so far in January. This would be its third best annual premiere of the last decade, after the Januarys of 2023 and 2018, when it achieved advances of 34.8% and 13.9% respectively.
In addition to the monetary scenario, in the case of the entity, possible acquisitions are being another of the catalysts, BPM and Commerzbank (although in the case of the German bank, for the moment, Unicredit has only defined its operations in the group as strategies investment).
In the last two years, Unicredit has been a recurring player on the podium of the most bullish EuroStoxx firms: in 2023 with its rise of 85%, it took the gold and in 2024, after a new rise of almost 57%, it reached the European silver. Now, analysts expect its shares to continue climbing over the coming months, potentially appreciating an additional 10%.
As in the case of Unicredit, BBVA also continues in the process of acquiring Banco Sabadell. Currently, the Basque bank is the second most bullish firm on the Old Continent, with an advance of just over 9%. In its case, its upward potential for the following months is 14%.
A semiconductor company sneaks between these banks. ASML achieved increases of slightly more than 9% in the year, especially driven by Microsoft’s investment plans, which will spend up to $80 billion in AI data centers this year, news that encouraged the chip sector in these early stages. of the year. Experts estimate increases of 14% until the end of the year.
Also around 9% are the revaluations of the pharmaceutical company Banco Santander and Bayer. In their cases, their upward paths are higher and reach 17% and 24% respectively, although only Santander is a buy for analysts.
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