The performance of various international equity indices in 2024 has been remarkable, with strong double-digit gains across the main US indices, which surpassed expectations at the start of the year. While the US equity market generated significant gains during the course of the year, there was a sharp divergence between the performance of the S&P 500 Index in the US and the Euro Stoxx 50, despite the strong start to the year for European equities. In fact, the Euro Stoxx 50 had surged by 8.
8% in the first four months of 2024, compared to more modest gains of 5.6% registered by the S&P 500 Index until the end of April. However, while the positive momentum of the S&P 500 Index continued throughout the year, the performance of the Euro Stoxx 50 was rather subdued for the rest of the year, and on a year-to-date basis, it is now showing gains of only 5.
9%. Undoubtedly, there are many factors that may have influenced the share price performance of the constituents within each index, but it is evident that the regional exposures of the top constituents within the Euro Stoxx 50 is having a notable impact in the context of heightened concerns on trade tariffs between major economies. Furthermore, given that the Euro Stoxx 50 is an index with less constituents, the share price movements of each company make a more pronounced impact.
Several companies within the Euro Stoxx 50 that performed negatively in recent months have material exposures to China, which impacts their financial perfo.