2023 Was a Good Year For European Equities

Overall, it was a good year for European stocks, notwithstanding some significant share price wobbles at bigger companies

Fernando Luque 2 January, 2024 | 9:41AM
Facebook Twitter LinkedIn


2023 was a very good year for European equities. The Morningstar Europe NR index (with dividends reinvested) gained 15.5% in euros, ending December up 4.0%.

For the whole year, large-cap companies outperformed their smaller counterparts by a wide margin. The former rose by 21.8% compared to 16.0% for the latter. In December, however, the opposite occurred: small caps gained 7.6% versus 3.6% for large caps.

Comparative returns lrg/sm cap

In terms of investment style, 2023 was the year growth companies gained 29.5%; versus 16.2% for value.

Value vs Growth

In December, the Large Growth style advanced by 3.8% thanks to the good performance of ASML (ASML), which gained 9.4%, and the two luxury giants – LVMH Moet Hennessy Louis Vuitton (MC) and L'Oreal (OR) – which posted gains of 5.2% and 4.5%, respectively. There were also significant falls in this market segment, however: Adidas (ADS) (-4.1%), Ferrari (RACE) (-7.7%), SAP (SAP) (-4.1%) and, above all, Prosus (PRX) (-11.2%), all witnessed share price drops.

On the value side, companies such as Rio Tinto (RIO), HSBC (HSBA), Kuehne + Nagel International (KNIN), and BASF (BAS) stood out in December, with gains of 7.6%, 5.0%, 16.8% and 14.3% respectively.

Style box

In terms of sectors, 2023 saw several sectors rise by more than 20% in euros. The biggest winners were technology (+33.4%), industrials (+29.8%) and financial services (+28.9%). Only one sector gained less than 10%. This was the defensive consumer sector, with a gain of 9.5%.

In December specifically, the real estate sector stood out in particular, with a 9.7% gain, in the heat of the fall in long-term interest rates. However, the energy sector was one of the few to suffer a decline of 0.7%. In particular, BP (BP.) and TotalEnergies (TTE) fell by 3.2% and 1.1% in euros, respectively.


Valuations ended the year in undervalued territory, except for the Large Growth segment, which ended December with a Price/Fair Value (PFV) of 1.08 (i.e. 8% overvalued). In terms of style, Small Value remains the cheapest style and, in terms of sectors, Real Estate is the cheapest, with a PFV Value of 0.78.



Guiding You Seamlessly into 2024

Sign up to our Daily Newsletters Now

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Fernando Luque

Fernando Luque  is Senior Financial Editor at Morningstar Spain 

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures