European equity markets posted its sixth positive month so far this year

The S&P Europe 350 concluded a volatile July with a 4.1% total return, posting its sixth positive month so far this year and recovering back nearly all of the losses incurred in June…. 

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Tim Edwards, Senior Director of Index Investment Strategy at S&P Dow Jones Indices


– The European equities markets began the month in a nervous mood, with traders closely tracking the perceived likelihood of a Greek default. The markets bottomed out in response to an “Oxi” in the Greek referendum, but with a suitably fudged last-minute short-term solution, duly found and passed in the Greek parliament, the markets returned to the winning ways established earlier this year.

– Intrigue continued with news on the last day of the month that the IMF will play no part in the current bailout unless a degree of debt relief is included; with Greek elections due in September, it seems reasonable to expect Greece to retain a guest spot in the headlines for the foreseeable future. Volatility markets, however, are indicating a degree of confidence regarding the immediate future: the VSTOXX® volatility index fell back below 20 by month end, having started the month in the 30s.

– Health Care has recently been posting stellar returns in developed nations across the world, and topped sector performances in Europe for July. In signs of increasing dispersion among stock performances, a gap of more than 10% separated the returns of the S&P Europe 350 Health Care sector from the month’s laggard – Materials. The latter largely reflected the continued turmoil in the commodity markets, with the S&P GSCI Agriculture and S&P GSCI Energy indices both recording double-digit losses this month.

– In terms of country contributions, improving headline employment figures boosted the UK stock markets and created the greatest contribution to regional returns, closely followed by France, punching above its weight on good results for car manufacturers. Most countries contributed positively, and none significantly negatively in July.

– With the immediate concern over Greece receding, and as the European Central Bank made public its intention to defend the bonds of other euro-area sovereigns from speculative attacks, the S&P Eurozone Sovereign Bond index gained 2.17% in July. The 2.36% return for the S&P Eurozone 7-10Yr Sovereign Bond index was the best since Ireland formally exited its own bailout program, back in January 2014.


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