European Stocks Pare Annual Gains With Worst December Since 2002

  • DAX gains for fourth year, while U.K., Spain market fall
  • Strategists see more gains for 2016, helped by ECB stimulus

With another day of declines, European stocks completed their worst December since 2002, trimming a fourth annual advance.

The Stoxx Europe 600 Index fell 0.4 percent in the last trading day of the year, taking its monthly drop to 5 percent and paring the 2015 gain to 6.9 percent. The volume of shares changing hands was more than two-thirds lower than the 30-day average on Thursday, with markets including Germany, Switzerland and Italy closed, while the U.K., France and the Netherlands shut early.

“It has not been a good end to 2015, with low liquidity making market weakness even more pronounced,” said Ramiro Loureiro, an analyst at Banco Comercial Portugues SA’s Millennium unit in Lisbon. “I do think 2016 will start better, especially now valuations are more attractive. The risk is that the global economy goes the wrong direction.”

While the Stoxx 600 is little changed this week, two weekly advances weren’t enough to erase monthly losses. After surging as much as 21 percent through its April record buoyed by European Central Bank stimulus, concerns that China’s slowdown would hamper the global recovery took over, just as oil and commodities deepened their slumps, Mario Draghi disappointed with his additional easing, and the Federal Reserve raised rates for the first time in more than a decade.

That’s still better than the U.S. market. The Standard & Poor’s 500 Index is little changed for 2015, after three years of gains surpassing 11 percent. And with a valuation of 16 times estimated earnings, Stoxx 600 shares remain cheaper than U.S. ones. Strategists see more gains for European equities next year.

Most European markets rose this year. Here are some of the highlights:
* Germany’s DAX Index climbed 9.6 percent, and strategists are betting the gauge has more to rally.
* France’s CAC 40 Index has advanced 8.5 percent, with PSA Peugeot Citroen and Renault SA surging more than 53 percent.
* Italy’s FTSE MIB Index was among the best performers, rallying 13 percent.
* Spain’s IBEX 35 Index, on the other hand, fell 7.2 percent amid political uncertainty.
* The U.K.’s FTSE 100 Index, hurt by miners’ slumps, lost 4.9 percent.
* Greece’s ASE Index is again one of the world’s biggest losers. It’s plunged 24 percent in 2015, as its banks reached record lows.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE