Key Points
- The pan-European STOXX 600 index gained 16.7% in 2025, its best year since 2021.
- Spain’s IBEX 35 was the top performer, soaring nearly 50%. Germany’s DAX rose 23%, and the U.K.’s FTSE 100 gained 21.5%.
- France’s CAC 40 was the laggard, with a more modest 10.4% gain.
- The final trading day of the year was quiet, with many markets closed for the holidays.
European stock markets just wrapped up an excellent year, with the main STOXX 600 index gaining nearly 17%. This marks its best annual performance since 2021. While the final trading day was quiet and slightly down, the overall picture for 2025 was one of strong growth across the continent.
The star performer of the year was Spain. The IBEX 35 index in Madrid soared almost 50%, leaving all other European markets in the dust. This incredible rally was a major surprise and showed a huge return of confidence in the Spanish economy.
Germany also had a fantastic year, with its DAX index climbing 23%. This growth was largely driven by government spending and large infrastructure investments, which helped the country’s industrial giants thrive.
In the U.K., the FTSE 100 continued its impressive run, gaining about 21.5%. This marks the fifth straight year of positive returns for the London-based index, a streak that many investors hope will continue into 2026.
The one major market that lagged was France. The CAC 40 in Paris posted a more modest gain of just over 10%. Investors were more cautious due to political uncertainty, growing concerns about the national debt, and rising interest rates.
The final day of trading was very subdued. With the New Year holiday just around the corner, many markets, including those in Germany and Italy, were already closed. The open exchanges, such as those in London and Paris, operated on a shortened schedule.
The FTSE 100 and the CAC 40 both dipped slightly, but these small moves didn’t change the fact that 2025 was a winning year for European stocks.
