European Stocks Stumble Amid Political and Economic Uncertainty

European stocks remained muted in the last trading session of 2024, with monetary policy uncertainty and political shifts halting a previous rally. The STOXX 600 recorded its worst quarterly performance in over two years, as economic challenges and political instability weighed on market sentiments across the region.

European stocks hit a pause in the final trading session of 2024, reflecting widespread uncertainty over future monetary policies and political developments. This uncertainty disrupted a rally that previously saw several markets reaching record highs.

The STOXX 600 index hovered flat as of 0821 GMT, poised to close its poorest quarter in over two years. Market activity was subdued, with major trading centers in Germany, Italy, and Switzerland already closed, and early closures in France, Spain, and the UK on the agenda for Tuesday.

Factors such as high market valuations, rising Treasury yields, and uncertainties regarding the economic climate in 2025 have contributed to the cautious mood in recent sessions. Despite the challenges, major U.S. indices still posted significant gains over the year, with the S&P 500 advancing nearly 24%, compared to a modest 5.4% increase in the STOXX 600, hindered by a weakening European economy, automotive sector issues, and political turbulence in France.

(With inputs from agencies.)