European Stock Markets Lead the World: 10 Out of Top 20 Are in Europe

Hungary, Czech Republic, and Slovenia Surge Over 60% This Year

This year, 10 out of the 20 most profitable stock markets in the world were in Europe.

According to Bloomberg on November 30 (local time), the Hungarian BUX Index rose by 66% in dollar terms, making it the fourth highest return globally.

On the 28th (local time), Frankfurt Stock Exchange, Germany. Photo by Reuters Yonhap News

The Czech PX Index followed with a 64% increase, ranking fifth in returns, while the Slovenian blue-chip SBI TOP Index climbed 62%, placing seventh. The Greek ATHEX Composite Index rose by 59%, and Spain's IBEX 35 Index gained 58%, ranking ninth and tenth, respectively. Other European markets that performed well included Poland's WIG20 (12th), Austria's ATX (14th), Luxembourg's LuxX (15th), Romania's BET (16th), and Ireland's Overall Index (18th).

Germany and France, the two largest economies in the Eurozone, ranked lower at 34th and 53rd, respectively. However, they still outperformed the United States, where the S&P 500 ranked 63rd. South Korea's KOSPI rose by 64% in dollar terms this year, ranking sixth.

Bloomberg reported that as the pan-European STOXX 600 Index posted its highest gain relative to the S&P 500 since 2006 in dollar terms, investors have become increasingly optimistic about the European market. This is because inflation is lower than in the United States, Germany is preparing to expand fiscal spending, and corporate earnings are showing signs of recovery. The strong euro has also contributed to the robust performance of European stocks this year, with the euro appreciating by 12% against the dollar in 2025.

Bloomberg explained that, this year, investor preference increased for European countries with high domestic demand such as Italy and Spain, due to the trade war initiated by U.S. President Donald Trump. Additionally, the relatively low exposure of European stock markets to artificial intelligence (AI)-related industries was seen as a major attraction at a time when concerns about a tech stock bubble are rising in the United States.

Florian Ielpo, Head of Macro at Lombard Odier Investment Managers, stated, "Europe is currently in a very good situation. Whenever doubts arise about the U.S. stock market rally, Europe will provide protection. This is basically because Europe does not have many tech stocks."

European stock markets have maintained strong momentum, particularly in sectors such as banking, defense, and renewable energy. European bank stocks delivered a 67% return this year. Defense industry stocks like Rheinmetall and Leonardo surged on expectations of increased defense spending across European countries, while stocks related to renewable energy also soared, driven by strong demand for AI infrastructure.

According to a recent monthly survey by Bank of America (BoA), investors are currently increasing their net allocation to European stocks while reducing exposure to U.S. stocks. Nick Lox, Head of International Equity Trading at BoA, indicated that there is potential for the European market to continue its strong performance next year.

However, some caution that optimism about Europe may be excessive. Persistent political uncertainty in France, doubts about Germany's economic stimulus measures, and intensifying competition with China in key industries such as consumer goods and automobiles are cited as potential risk factors.