Stock exchanges in Europe
Stock market outlook for 2025: Europe does not expect any big jumps
If stock market prices rise, there is talk of a bull market. They are falling, from the bear market. Even if developments cannot be predicted, the bulls could have a difficult time next year.
After two strong years in a row, 2025 could be a weaker one on Europe’s stock exchanges. In view of geopolitical and economic challenges, experts do not expect any major leaps. However, the German leading index Dax and its Eurozone counterpart EuroStoxx 50 should have some room for improvement after gains of more than 40 percent and almost 30 percent respectively since the beginning of 2023.
“Investors should prepare for the fact that 2025 will be a year with both challenges and opportunities,” says UBS Europe CEO Tobias Vogel.
Impulses from China and the USA
In the USA, Donald Trump will push forward his “America First” policy as president in 2025. “Higher tariffs and other interventions in free world trade are risks,” explains Vogel. But at the same time, tax cuts and deregulation in the USA could also give companies and markets in Europe a positive boost.
In China, one of the most important markets for many European companies, the economic situation has been poor since the corona pandemic. Hope rests on a more active fiscal policy by the Chinese government announced in December, i.e. additional government funds for the domestic economy.
In this country, the early federal election will take place after the traffic lights go out. The outcome and the discussion about reforming the debt brake are important factors for Germany’s economic outlook, as Robin Winkler, chief economist for Germany at Deutsche Bank, explains.
Draghi plan could bring investments
All in all, experts are expecting growth in Europe again in the new year, despite the numerous challenges: moderate in Germany, France and Italy, more noticeable in Spain, Great Britain and Switzerland. “Overall, the situation is likely to improve as wage growth remains strong while interest rates fall,” says UBS Europe board member Vogel. With regard to the European Central Bank, he expects further reductions of a total of one percentage point by the middle of the year.
Hope rests on the Draghi plan. If former ECB President Mario Draghi’s “Agenda to Improve Competitiveness” is implemented, this would mean investments of around 800 billion euros annually in Europe.
Most experts see the Dax and the EuroStoxx as being slightly positive at the end of 2025, or neutral in the worst case scenario. Berenberg Bank sees the German leading index at 22,000 points in one year and the Eurozone leading index EuroStoxx 50 rising to 5,300 points. Currently this would mean an increase of almost ten percent for the Dax and a good eight percent for the EuroStoxx. DZ Bank has a little less on the list with 21,500 points for the Dax and 5,200 points for the EuroStoxx.
dpa
Source: Stern
