Last year, the Milan stock exchange ranked third, and in 2023 it topped the podium with a +28% return.
The snapshot as of today, with six trading sessions left in the year, shows the Ibex index up more than 46% since the start of the year, followed by the Ftse Mib at +29% and the Dax at around +20%.
Trailing further behind are the Zurich and Nordic stock exchanges. Bringing up the rear is the Cac-40, the blue-chip index of the Paris stock market, with a gain just below 10%, hampered by political uncertainties and the volatile performance of luxury stocks due to the United States' tariff policy.
For the fourth consecutive year, the Ftse Mib index outperformed the Stoxx Europe 600 index.
BANKING M&A LEADS THE CHARGE
The main drivers in Milan and Madrid were the strong gains in the banking and insurance sectors, boosted by M&A activity, which accounts for around 40% of the total capitalization of the blue-chip indices in both markets.
Defense, telecoms, and utilities also performed well.
"The first part of the year was shaped by uncertainties following the announcement of US tariffs on European imports, culminating in Liberation Day on April 2. In this climate of global uncertainty, European stock markets nevertheless outperformed thanks to the strength of more domestically focused sectors, less affected by tariffs," notes Chiara Robba, head of Ldi Equity at Generali Asset Management.
Major banks such as UniCredit and Intesa Sanpaolo played a decisive role again this year, as did smaller banks, buoyed by sector consolidation that saw Banca Mps acquire Mediobanca and Bper take over Banca Popolare di Sondrio.
"So far, the decline in net interest margins has been more than offset by higher fee generation and effective cost control, supported by significant sector consolidation," highlights Kepler Cheuvreux in a study on the Italian market published by Macquarie.
UniCredit has risen about 83% since the start of the year, followed by Intesa at +52%.
Even more stellar are the gains by Spanish bank stocks: Banco Santander is up 122% and Bbva 103%. The total return of the European banking sector is up more than 70%.
The second sector supporting both the Italian and Spanish stock markets is utilities, which are growing on the back of fundamental economic drivers and expectations "of strong demand for energy and electrification in Europe over the coming years, with investments in infrastructure, also thanks to the data center boom," explains Robba.
"As a result, the sector posted a 30% total return," she adds.
In Spain, Endesa is up 48% year-to-date, parent company Enel rose 25%, while Italgas boasts an 84% gain, also driven by its merger with F2i.
The third pillar has been defense, with Iveco and LEONARDO among the five best-performing stocks on Piazza Affari, up 101% and 81%, respectively, thanks to strong investor buying, mainly spurred by rising geopolitical tensions worldwide, triggered by recent conflicts in the Middle East and Ukraine.
In Iveco's case, the surge was also sparked by the sale of its defense business to Leonardo and the simultaneous acquisition of the rest of the company by India's Tata Motors.
Finally, TIM also delivered a strong performance, posting a gain of over 100% for the year, surprising investors after years of lackluster returns, "thanks to changes in corporate governance and strategic restructuring, including an increased stake by Poste Italiane in the company's capital," notes the Kepler Cheuvreux study.
(charts by Andrea Mandalà, editing by Gianluca Semeraro)
