European Stock Markets Show That 2022 Is Worst Year for European Stocks After 2018

The worldwide economy still struggled to get rid of the post-Covid-19 economic recession.

Today, Europe’s biggest index, “The pan-European Stoxx 600,” experienced one of the worst declines in its trade volume as it slipped by 12.76%.

This accounts for the worst performance since 2018 when the annual trade volume declined by 13.24%. In contrast,” The European blue-chip index” jumps by 22.25%.

The Russian-Ukraine War, U.K.’s economic crisis, high inflation, and immensely expensive energy are why European markets had the worst year since 2018.

A Look At the pan-European Stoxx 600 Index

On Friday, some of the biggest companies’ shares decline significantly. As a result of the index decline.

A deeper look shows that France’s CAC 40 declined by 1.5% at the end of the day. Moreover, Germany’s DAX slipped by 1.1%. These bourses bagged an annual decline of 9.5% and 12.5%, respectively.

Apart from these, U.K’s FTSE 100, which was only opened for trade for just half-day, has seen a decline of 0.8%. However, it recorded a yearly gain of 1.2%.

Some other domestic indexes were among the biggest losers as the 2022 trade year ended. Few European indexes have suffered the worst declines since 2008’s global recession.

2022 Was the Year of the Global Economic Crisis?

A look at 2022 shows that most global firms struggled to recover from the recession created by Covid-19.

Moreover, the recent lockdowns in China due to the country’s Covid-19 troubles also worsened the economic landscape in 2022.

High unemployment and inflation rumors also disturbed the flow of the markets. U.K’s political unrest put extra pressure on London Stock Exchange.

The stock markets in U.S. and Europe were highly bearish as energy stocks fell apart in 2022. Some of the world’s biggest Tech giants, such as Facebook, Google, Amazon, and Tesla, have performed poorly in the market.

Tesla, in particular, whose share price has gone down by more than 70%.

As the prices of energy increased, this has forced Federal banks across the globe to raise their policy interest rate to control hyperinflation.

According to experts, the U.K. is expected to have the longest recession, and the eurozone may continue to see more decline even in 2023.

Experts are unsure about Europe’s economic future because of the ongoing Russia-Ukraine war. Despite all the economic sanctions imposed by Russia, Russia remains baffled.

In addition, Russia has found a new market for its oil and gas experts, with India and China being the front-row buyers.

It is not sure when this war is going to end. But one thing is certain Europe is now buying Russian gas, and the prices of energy in Europe will only rise. That means the energy crisis is still among the biggest issues in Europe for the upcoming 2023.

Investors, on the other hand, also need clarification about what the outlook will be for 2023.

The Feds drove the economy in 2022. Tight monetary policies, high-interest rates, and liquidity sell-offs were all done to avoid recession.

But the technical indicators throughout the years were troublesome. Chances are high that 2023 will have similar issues. This means Feds can only artificially drive the market for a short time.

CNBC’s Market Experts Have Shared Their Opinion

The experts believe that 2023 will be different from 2022. It will not be possible for the Feds to determine the economic outcomes. Investors will look at the fundamental indicators of companies.

Companies must go out of the box to improve their earning potential.

Investors will only invest in companies offering high earning possibilities per share. This means companies have to ensure that their earnings margin is far higher than in 2022.

Experts have also said that if European stock markets want to do well, European companies and legislators must find a solution to their energy troubles. With the current energy crisis, positive outcomes are not possible.