European equities delivered a strong performance in 2025, even as trading ended on a subdued note during the final session of the year.
On the last trading day, markets that remained open closed slightly lower. The FTSE 100 slipped 0.1%, while France’s CAC 40 and Spain’s IBEX 35 each declined by 0.2%.
Activity was muted ahead of the New Year holiday, with exchanges in Germany, Italy, and Switzerland already shut. Markets in France, Spain, and the United Kingdom operated on shortened trading schedules, keeping volumes light.
Despite the quiet close, the broader European market posted an impressive year. The pan-European STOXX 600 advanced around 16.7% in 2025, marking its strongest annual gain since 2021.
Spain emerged as the standout performer, with the IBEX 35 surging nearly 50% over the year, far outperforming its regional peers.
Germany’s DAX climbed about 23% in 2025, supported by government fiscal stimulus measures and targeted investments in infrastructure.
The FTSE 100 extended its long-running streak of annual gains. Britain’s benchmark index rose roughly 21.5% during the year, securing its fifth consecutive year of positive returns despite more uneven performance in prior periods.
France’s CAC 40 lagged other major European markets, posting a gain of just 10.4%. French equities were weighed down by political uncertainty, rising fiscal debt concerns, and higher bond yields, which capped upside momentum compared with regional counterparts.
