FX.co ★ European Equities Poised for Strongest Year Since 2021

European stock markets reached unprecedented levels on the closing day of 2025, marking their most successful year since 2021. This surge was fueled predominantly by the banking and mining sectors. The STOXX 50 index rose by 0.5% to approach a historic high of 5,785 points, and the broader STOXX 600 experienced a similar rise, closing at a new peak of 592 points. Over the year, the STOXX 50 is poised to conclude with an approximate 19% increase, while the STOXX 600 is expected to rise by 17%. The banking sector spearheaded this remarkable upturn, with an impressive rise of 67%, closely followed by the basic resources sector, buoyed by escalating prices of gold, silver, and other metals. Utilities also played a significant role, benefiting from increased power demand due to data center operations and the broader trend towards electrification. Due to holiday closures, markets in Frankfurt, Zurich, and Milan remained closed, whereas London, Amsterdam, Brussels, Paris, and Madrid had shortened trading sessions. Concurrently, the Federal Reserve's meeting minutes disclosed deliberations among policymakers about potential U.S. economic risks before reaching a consensus to reduce interest rates in December.