European Stocks Trim 2016 Decline as FTSE 100 Closes at Record

European stocks rose on the last trading day of the year, trimming their first annual decline since the peak of the sovereign-debt crisis in 2011.

The Stoxx Europe 600 Index added 0.3 percent at the close, with trading volume about 60 percent lower than the 30-day average. Real estate firms climbed the most, helping the measure reverse losses of as much as 0.4 percent. The U.K.’s FTSE 100 Index rose 0.3 percent to end the year at a fresh record.

Europe’s benchmark gauge never fully recovered from losses at the start of the year spurred by concern about a slowdown in China. Then came investor concerns about the region’s economy, political uncertainty and Italy’s banking crisis.

The Stoxx 600 traded in a range of fewer than 50 points for most of the year, before picking up momentum in the final quarter. That’s when the U.S. presidential election spurred bets for stronger global growth and the European Central Bank broadened its bond-buying program. The gauge has rallied 5.7 percent in December, the most in more than a year, as the euro slumped.

  • The FTSE 100 capped one of the best performances among western-European markets in 2016, up 14 percent thanks to a slumping pound that boosted its exporters and a rally in commodity producers.
  • Benchmarks of Italy, Portugal and Denmark were the biggest losers of the year among developed markets, down at least 10 percent.
  • The Swiss Market Index has lost 6.8 percent in 2016, hurt by a rotation out of defensive sectors and into cyclical shares seen benefiting from economic growth. The equity measure has a heavy weighting of consumer staples and health-care firms.
  • The Stoxx 600 is 1.2 percent below last year’s closing level. Strategists on average forecast the index will finish 2017 at 366, implying a gain of less than 1.3 percent from Friday’s close.

— With assistance by Elena Popina

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