The price of European sector indices continues its upward trend, coloring the stock markets green in one of the most uncertain years in modern economic history.
2023 was a year of positive surprises for European stock markets, defying the predictions of experts and investment banks who had predicted a difficult period due to the recession. Contrary to expectations, European stock markets showed extraordinary resilience, facing a technical recession, mainly linked to the challenges of the German economy, the rapid "V-shaped" reduction of the inflation rate, and the process of independence from external supplies. What were the winning sectors?
Not just banking: here are the best-performing sectors
Despite these economic challenges, the European stock market experienced a year of extreme upside, exceeding expectations. The first half of 2023 saw technical restarts that seemed unrepeatable, but even in the second half of the year, European stock sector indices continued to record exceptional performances.
Among the sectors that have led the charge, banking stands out, with impressive growth of 25%. This increase can be attributed in part to the increase in interest rates, favored by the consistency in household consumption. Following this, the media and communications sectors saw a significant increase, along with surprising growth in the automotive sector, highlighted by the STOXX 600 Automobiliers & Parts, which marked growth of 20,48%.
Furthermore, it is interesting to note that the weakest performing sector was the energy sector, with the Euro STOXX Oil & Gas showing a slightly negative performance yearly, and a contraction of 2.56% monthly, in response to the depreciation in the price of energy raw materials.
This progress has occurred alongside a slow and steady decline in the market’s Volatility Index, with the STOXX 50 Volatility (VSTOXX) decreasing by 40% over the year.
The economic scenario is changing: what is happening in the stock market?
However, the last few months of trading have seen a change in direction in the attention of market participants. Although the previously mentioned sectors have benefited from interest rate increases, the most recent month has seen a shift towards other sectors, given the growing expectation of a reduction in key rates. The technology sector has emerged as the most popular, with the STOXX Europe 600 Technology marking particularly linear growth, recording an appreciation of 9% in the last month alone. Financial services followed closely, maintaining returns in line with the technology index.
In summary, 2023 has seen unstoppable growth in European stock markets, with sectors such as banking, media and communications, and automobiles driving the positive trend. However, investor attention has recently shifted towards the technology sector, as market expectations regarding ECB interest rates have changed, driving further increases, alongside a steady decline in bond yields.
Original article published on Money.it Italy 2023-12-14 08:41:00. Original title: Azioni Europa, ecco i settori più performanti del 2023
