Global Stock Markets Defy Fears, Post Strong Gains in 2025

Global stock markets have defied expectations in 2025, posting significant gains despite widespread fears of economic downturns fueled by geopolitical tensions and concerns over inflation. Contrary to predictions of market collapses, major indices have thrived, turning potential threats into opportunities for growth.

European Markets Lead the Charge

European stock exchanges have shown remarkable resilience, with several markets outperforming expectations. Madrid's Bolsa de Madrid leads the continent with a staggering 49% increase since the beginning of 2025.

Milan's Strong Performance

Milan's FTSE MIB has also achieved a notable performance, closing 2025 with a 32% increase. This growth is primarily driven by defense stocks and financial institutions involved in banking restructurings.

The European podium for 2025 is set with Madrid leading, followed by Piazza Affari. For the third consecutive year, Milan's stock exchange has recorded one of the best performances among European equity markets. Furthermore, the FTSE MIB index has outperformed the Stoxx Europe 600 index for the fourth year in a row.

Other key European markets include:

• Frankfurt: +22%
• Zurich: +14.1%
• Amsterdam: +7.14%
• Paris: +9.79%

The performance of Madrid and Milan shares common roots in the strong performance of the banking and insurance sectors, which represent approximately 40% of the total capitalization of the blue-chip index in both markets.

Here is a glimpse into the performance of European markets:

"The early part of the year was influenced by uncertainties following the announcement of US tariffs on European imports, culminating in Liberation Day on April 2. Despite this global uncertainty, European stock exchanges performed well due to the strength of more domestic sectors, which were less impacted by the tariffs," said Chiara Robba, head of Ldi Equity at Generali Asset Management.

Banking Sector Drives Growth

The banking sector has been a significant driver of market performance in both Italy and Spain.

"Major banks such as Unicredit and Intesa Sanpaolo played a decisive role again this year, as did smaller banks, supported by sector consolidation that led Banca Mps to acquire Mediobanca and Bper to take over Banca Popolare di Sondrio," Reuters commented.

Here are the performances of key banking stocks:

Defense Stocks Soar Amidst Geopolitical Tensions

Defense stocks have also experienced record performances, fueled by increasing geopolitical tensions.

Fincantieri leads the FTSE MIB with a 145% increase, while Iveco (+101%) and Leonardo (+91%) have also performed well, driven by strong investor demand due to conflicts in the Middle East and Ukraine. Iveco's performance was also influenced by the sale of its defense business to Leonardo and the acquisition of the rest of the company by India's Tata Motors.

Here's how defense stocks performed:

Telecom Italia (Tim) Surprises the Market

After years of disappointing performance, Tim (Telecom Italia) has surprised the market with a 110% increase in 2025.

This surge is attributed to changes in corporate governance and strategic restructurings, including an increased stake by Poste Italiane, according to a study by Kepler Cheuvreux.

Laggards in the Market

Not all stocks have performed well. Amplifon (-45%) and major automotive companies like Stellantis and Ferrari, which fell by 25% and 22% respectively, have been negatively impacted by the crisis in the European automotive sector.

Here's a snapshot of the underperforming stocks:

US Markets Show Resilience

Despite concerns about a potential bubble, the Nasdaq has been the best-performing index in the US, driven by tech giants like Nvidia (+40%), Microsoft (+16%), Amazon (+6%), and Apple (+9.8%), as well as Palantir (+157%) and Oracle (+19%). The Nasdaq has risen by over 22% since the beginning of the year.

The other major US indices have also shown resilience:

• S&P 500: +17.8%
• Dow Jones: +14.5%

These gains have occurred despite tariffs, controversies surrounding the Federal Reserve, and the longest government shutdown in history.

Asian Markets Surge

South Korea's Kospi leads global markets with a 72% increase, closing at 4,129 points. This surge is primarily due to a rally in chip manufacturers. Nvidia's announcement to supply the South Korean government and companies like Samsung and Hyundai with 260,000 of its most advanced chips has fueled optimism.

Political Stability Boosts Kospi

Political stability following the attempted coup by former President Yoon Suk Yeol in late 2024 has also contributed to the market's success. The new president, Lee Jae Myung, has eased tensions with the United States and convinced Trump to reduce tariffs on Korean-made products from 25% to 15%.

Other notable performances in Asia include:

• Shenzhen: +30%
• Hang Seng (Hong Kong): +28.7%
• Shanghai: +18%
• Nikkei (Tokyo): +27.2%

Here's a recap of Asian market performances:

Global Market Summary

Overall, 2025 has been a year of surprising growth and resilience for global stock markets. Despite numerous challenges and fears, major indices have thrived, demonstrating the strength and adaptability of the global economy.