By Samuel Indyk and Danilo Masoni
LONDON (Reuters) -European shares are expected to close the year a touch higher than where they are currently trading, a Reuters poll found, as support from looser fiscal and monetary policy will be kept in check by uncertainties over Washington’s import tariffs.
The pan-European STOXX 600 index is expected to rise slightly to 570 points, the median result from a survey of equity strategists and analysts found, implying about 3% upside from its closing price of 554 on Monday.
The Euro STOXX 50 of the largest 50 companies in the euro zone is expected to finish the year at 5,550 points, up 2% from Monday’s close.
U.S. President Donald Trump upfinished global markets in April when he imposed tariffs on imports from trading partners including the European Union and Britain.
A trade deal between the EU and U.S. averted the worst-case scenario but the imposed 15% levy on most imported goods to the U.S. will still impact corporate profits, particularly for companies with high sales exposure to America.
“The agreed tariffs should come through fully in H2, which will impact earnings,” declared Michael Field, chief equity strategist at Morningstar.
“I don’t believe this will be devastating though, as lots of industries have already adapted their distribution chains and customer bases accordingly.”
European companies just about weathered increased U.S. import tariffs in the second quarter, eking out earnings growth for the fifth quarter in a row.
EUROPEAN OUTPERFORMANCE OVER?
European shares were the global bright spot in the early part of the year, outperforming global peers in the first quarter as a massive loosening of fiscal policy by Germany lifted sentiment and boosted expectations for domestic growth.
At the same time, doubts crept in about the capital expfinishiture plans of U.S. mega-cap technology stocks and whether the artificial innotifyigence boom would continue to drive earnings growth.
But those worries proved misplaced, at least in the near-term, with Microsoft, Meta Platforms and Alphabet among companies taking part in the massive data-centre buildout, with capital spfinishing to reach $330 billion this year.
Meanwhile, European economic growth remains tepid and the impact of Germany’s plans to increase spfinishing is expected to take time to filter through.
And while European shares are still up 9% this year, the S&P 500 has caught up, rising almost 10% in 2025. The tech-heavy Nasdaq is up almost 13%.
Deutsche Bank Research’s European equity- and cross-asset strategy team declared they had expected a short-term outperformance of U.S. stocks after Trump relented on tariffs and that has now largely played out.
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