Looking at the performances of the five main European stock markets since the beginning of the year – Italy, Spain, Holland, France and Germany – a more complex reality emerges than clichés suggest. This is what emerges from an analysis by eToro, signed by market analyst Gabriel Debach, according to which on the one hand there is the Netherlands, which remains one of the most relevant technological hubs on the continent, thanks to the presence of global champions such as ASML, the first European company by market capitalisation, and on the other there is Italy, often perceived as a more traditional and less innovative market, but which on the stock market is showing a surprising ability to generate widespread performances, across different sectors, managing to outperform Wall Street not only from the beginning year, but also in three of the last four years preceding 2026.
Performance since the beginning of the year
If we look at the performances of the main European indices since the beginning of the year, the picture appears rather clear. At the closing data of 26 June, Milan leads the group with an increase of 13.92%, ahead of Madrid (+11.9%), Amsterdam (+11.5%), Paris (+2.7%) and Frankfurt (+0.7%). Translated: excluding dividends, Piazza Affari traded almost five times more than the CAC 40 and almost eighteen times more than the DAX.
But indices only tell part of the story. They are the result of weights, concentrations and national samples that often end up hiding what happens beneath the surface. When you put each company on the same level and observe the average performance of the individual components, in their total return version, the picture changes. Holland becomes the strongest market in the sample with an average return of 14.9%, ahead of Spain at 13.5%, Italy at 13.3%, France at 8.4% and Germany at 2.0%.
The expansion of the temporal framework
The photograph is further enriched if the time horizon is broadened, because the five countries did not arrive at this result in the same way or at the same time. Applying the same logic to the securities currently present in the respective baskets, Italy remains the strongest market even over three years, with a cumulative total return yield of 150%, followed by Spain with 121%, while Germany and Holland remain essentially tied, 75% against 62%, and France closes the group with 51%. The Italian advantage, therefore, does not arise in 2026. Although it reflects the current composition of the indices, the comparison tells a story that has been building for years, consistent with the long season of the banking renaissance.
On the one-year horizon the sequence changes again and becomes more instructive, the eToro expert points out. Spain leads with +38%, ahead of Italy at 27%, Holland at 19%, France at 16% and Germany, also last here, with just 7%. Comparing the one-year return to the year-to-date performance shows that not all markets have accumulated value at the same time. Spain and Italy had already built an important part of their advantage in the second half of 2025, maintaining a more limited but still solid pace in 2026, both around +13% YTD. The Netherlands, on the other hand, has concentrated almost all of its acceleration in the current year: the +15% from the beginning of 2026 explains much of the +19% cumulative over twelve months, outlining a more recent performance profile and therefore more exposed to the risk of momentum normalization.
France shows a more regular dynamic, with a +16% in one year made up of a more balanced contribution between the previous period and the 8% achieved from the beginning of 2026, but without a three-year value accumulation comparable to that of the strongest markets. Finally, Germany does not describe a sudden collapse, but a progressive loss of momentum: the +75% over three years remains higher than the Dutch figure, but the +7% over one year and above all the +2% YTD signal a dynamic that has weakened over time, more due to gradual erosion than the effect of a single shock.
The locomotive sectors
But the average data per country, over any horizon, is only the first layer. The second, more revealing, is internal dispersion. Dividing the 185 stocks into five quintiles of YTD performance, the worst fifth loses an average of 24%, the fourth loses 2%, moving into positive territory with 8.7% of the third, 17.5% of the second, up to the average 50.2% of the winning quintile. Thirty-seven names, exactly one fifth of the sample, make the difference between a mediocre year and an exceptional year for those who have them in their portfolio, claims Debach.
And this polarization does not end in the short term, it widens with the time horizon. Over the year (1Y) the worst quintile loses 23% while the best gains 69.6%, a gap of approximately 92 percentage points compared to 74 in the YTD. Over 3 years, the winning quintile reaches a cumulative plus of 148.9% compared to a modest plus of 4.1% for the losing quintile, a gap of almost 145 points. The gap does not diminish by lengthening the horizon, it widens, because those who have intercepted the right themes have simply had more time to compose the performance. There is no reversion towards the mean, there is accumulation of relative strength upon relative strength, and it is the clearest signal that the market is not yet pricing in a rotation.
We already know who these winners are. Especially semiconductors, which have recorded an average increase of 122% since the beginning of the year, with STMicroelectronics +180% on both the French and Italian lists, BE Semiconductor at 112%, ASM International at 83%, ASML at 71%, Infineon at 109%. The same concentration logic that we have long observed on the S&P 500, replicated on a European scale.
The second block of strength comes from the banks, an average plus 15% on 19 stocks, with Mediobanca at 50%, ABN AMRO at 26%, BNP Paribas 25%, CaixaBank 21%, Banco BPM at 20% and Banco Santander at 19%. The Italian banking risk and the repricing of real rates have acted as common fuel, with the partial exception of Germany, where the average contribution stops at 0.2% (here however considering the entire financial sector, and not just the banking sector). The third block is energy, driven by tensions on the Strait of Hormuz, a plus 35% on just seven stocks, Saipem +72%, Tenaris at 49%, Repsol at 37%, Eni at 27% and TotalEnergies at 24%. Only Shell reports single-digit growth (+9%).
On the other hand, cars and luxury remain the big absentees from the party. The car sector loses on average 13%, Stellantis under 47%, BMW down 33%, Porsche down 27%, Mercedes Benz down 23%. Luxury declines by an average of 11%.
The differences within the sector
There is a detail that reading by sector alone does not fully reveal, and which the breakdown by quintile within each sector reveals. Technology is the most polarized sector of the entire panel, in the worst quintile it scores an average of minus 30.9%, here SAP, Capgemini and Dassault Systèmes weigh in, in the winning quintile (of semiconductors) plus 122%. Same sector, opposite outcomes, a sign that talking about technology as a single block is not enough, it is the semiconductors that win, it is the software that pays the highest price. The same pattern is repeated, with different intensity, in industrials, from minus 29.6% in the worst quintile to plus 43.5% in the best, in Financials from -19.4% to +34.6%, in Materials from -13.9% to +32%. Almost no sector is internally homogeneous, dispersion also exists within the same sector, not just between different sectors.
Energy and Utilities are the clear exception to this rule, the only two sectors completely absent from the worst quintile. None of the energy or utility stocks observed in the panel are among the worst of 2026. Energy starts from a minimum of +9.1% in the third quintile and reaches +39.4% in the fifth, utilities from +0.2% in the second quintile to +33% in the fifth. They are the only two sectors that this year have not produced a single structurally losing title, a characteristic that further strengthens the advantage of those who, like Italy and Spain, carry many in their belly, and which penalizes those, like Germany, who are almost completely without them.
Lessons for the investor
According to eToro’s analysis, what makes this story instructive is not only which sectors have won, but how many stocks in that sector each list carries, because in an equal weighted universe each name weighs exactly the same as the others. Germany pays a double bill. It only has two technology stocks, Infineon and SAP, which together mark an average of 38%, a flattering number which however hides Infineon at +109% and SAP -34%, with each move weighing on half the sector. It has seven stocks in discretionary consumption, the largest group in the sample in that sector, which fell by 12.4%, and another six in healthcare which recorded a +0.4%. And it doesn’t even have an energy stock, while energy, as seen, hasn’t produced a single loser. Italy has built the exact opposite. Thirteen financial stocks, the highest number in the sample ever, at an average of 14.3%, six utilities at 9%, three energy stocks at 49.4%. A base distributed across multiple engines simultaneously. France carries the weight of seven discretionary stocks, mostly in the luxury sector, which fell by 12.8%. The Netherlands concentrates almost all its strength on three technology stocks that return 89%, a narrower but successful bet.
The most direct consequence for those who look at Europe as a single block is that passive exposure to a broad index delivers an average return that hides enormous variance, on every time horizon, between countries, between sectors, within the same sector and within the same country. There is no gradualness between those who have increased more than 50% since the beginning of the year and those who have lost more than 20%, there is a clear leap, and it is a leap that widens further the longer the observation horizon is extended.
“Talking about Europe as a single story, in 2026, is an increasingly stylistic exercise – states the expert – There are at least two equity Europes in the same geographical space, one concentrated in a few names, a few sectors and a few themes that rides on artificial intelligence and infrastructure (despite the recent week), the other more numerous, more silent, which still carries the weight of mature industrial models in the repricing phase. And the difference between the two, security by security, sector by sector, country by country and quintile by quintile, it is proving to be anything but temporary.”
