Spain vs. England: Stock indexes hint at Euro 2024 winners?

• SPN35 index has risen 9.8% so far this year
   
• UK100 index has risen 6.2% so far this year
   
• Markets predict SPN35 can climb another 18.7% within 12 months
   
• Markets predict UK100 can climb another 14.4% within 12 months
   
• Spain favoured to beat England in Euro 2024 final

 

England and Spain are set to battle it out for Europe’s footballing crown this Sunday, July 14th.

In the lead up to this highly-anticipated football contest, we take the opportunity to compare how their respective stock markets have fared so far this year.

 

First, here are some basics about stock indexes.

What is a stock index?

Imagine a stock index to be a basket of stocks.

This index measures the combined performance of the stocks within that “basket”.

Hence, the index’s price should rise when the prices of the stocks in that basket are moving higher, and vice versa.

 

What is the SPN35 index?

FXTM’s SPN35 index tracks the performance of the IBEX 35 index.

The IBEX measures the combined performance of the 35 most-liquid stocks traded on the Spanish Continuous exchange.

This index includes big names such as Inditex (one of the world’s largest fashion retailers which owns brands such as Zara, Pull & Bear, and Massimo Dutti), energy giant Iberdrola, and Banco Santander one of the EU’s largest banks by market value.

 

What is the UK100 index?

FXTM’s UK100 index tracks the performance of the FTSE 100 index.

The FTSE 100 measures the combined performance of the 100 largest companies listed on the London Stock Exchange, including global names such as AstraZeneca, Shell, HSBC, Unilever, and BP.

 

Although these men’s national football teams will do battle at the summit, the stock markets tell a different story.

Despite their footballing conquests, neither Spain’s nor England’s benchmark stock indexes are at the top of the continental heap.

Here’s how FXTM’s European stock indices have performed so far in 2024:

• NETH25: +19.8%
   
• EU50: +10%
   
• GER40: +10%
   
• SPN35: +9.8%
   
• UK100: +6.2%
   
• FRA40: +0.9%

And when stacked against their global peers, European stock indices have mostly lagged their US and Asian peers year to date:

• TWN: +31%
   
• JP225: +26.2%
   
• NAS100: +22.9%
   
• US500: +18.1%

 

Still, if making the comparison solely between the two Euro 2024 finalists’ benchmark stock indexes, there’s one clear winner.

The SPN35 index has outperformed the UK100 index so far in 2024.

And this outperformance is forecasted to extend over the next 12 months.

• SPN35 is forecasted to climb another 18.7% till mid-2025
   
• UK100 is forecasted to climb another 14.4% till mid-2025

 

The stock indexes seem to affirm the same outcome as forecasted by the sports betting industry:

Spain is favoured to beat England in the Euro 2024 final.

And that's despite England being ranked higher (5th) on the FIFA Men’s World Ranking, compared to Spain (8th).

 

Yet, to be diplomatic to England football fans however, the FX arena paints a vastly contrasting picture.

The British Pound has strengthened by 2.8% against the Euro so far this year.

Also, GBP is the only G10 currency that has a year-to-date gain versus the US dollar.

• GBPUSD: +1.1%
   
• EURUSD: -1.7%

 

Still, anything could happen in the sporting final, hence the drama.

To be clear, financial markets are far more influenced by fundamental factors, including macroeconomic data, central banks' policy outlooks, and even political risks, rather than fleeting bouts of sporting euphoria or despair.

Similarly, football teams do not rely on stock markets when preparing for major tournament finals.

Yet no matter the outcome of the England vs. Spain Euro 2024 final, traders and investors can take heart from the fact that financial markets do not just trade once every 4 years (unlike the Euros football tournament).

The SPN35 and UK100 indexes, along with a host of other financial instruments, are available for trading across FXTM's platforms all year round.

 

 

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