Europe’s Steady Hand Amid Global Storms May 21, 2025
Table of contents
- Global Trade War, Tariffs, and Volatility
- Europe’s Steady Hand
- Investing in Europe
- European Market Guide
Global Trade War, Tariffs, and Volatility
In recent weeks, the global financial landscape has been rattled by a series of disruptive events, from the implementation of protectionist tariffs to the ongoing trade tensions between the US and China. These geopolitical frictions have triggered ripple effects across economies, unsettling investor sentiment and amplifying market volatility worldwide.
Against this backdrop of uncertainty, the importance of diversification has never been more apparent. Investors today face both market risk and heightened geopolitical and policy-driven risks. In such an environment, geographical diversification plays a crucial role in preserving capital and uncovering new opportunities that may be overlooked in more turbulent markets.
Last Updated: 15 May 2025
Notably, while the S&P 500 has slumped by -0.18% year-to-date (YTD), weighed down by inflationary concerns, tighter monetary policy, and tech-sector volatility, European markets have shown signs of relative resilience. Germany’s DAX 40 Index, for instance, has posted a positive return of 17.41% YTD, standing out as a rare bright spot amid broader global uncertainty. Meanwhile, France’s CAC 40 Index and the UK’s FTSE 100 Index have experienced more modest declines of 5.88% and 4.61%, respectively, faring considerably better than their US and Chinese counterparts.
Europe’s Steady Hand
This divergence is not merely a matter of performance but a reflection of fundamental differences in market structure and macroeconomic drivers. European indices typically exhibit greater exposure to sectors such as industrials, financials, and consumer staples, areas that are generally more resilient during periods of heightened volatility. Unlike the tech-heavy compositions of the US and China, these sectors are less sensitive to abrupt monetary policy shifts and speculative sentiment, providing a more stable foundation amid global uncertainty.
Source: Eurostat
Based on Eurostat data, automotive manufacturers are likely to be the most significantly impacted by the implementation of tariffs. This sector faces the potential for notable revenue losses, supply chain disruptions, and production cutbacks. In contrast, the outlook for general industrial machinery and medicinal and pharmaceutical products is more nuanced. The impact on these sectors will largely depend on the competitiveness of US domestic manufacturing, local production capacity, and the trajectory of economic growth. If US producers are unable to meet demand cost-effectively, European exports in these areas may remain resilient despite tariff headwinds.
As investors reassess their global allocations in 2025, European equities may present an attractive low-volatility alternative, offering not only a hedge against regional concentration risk but also the potential for consistent, income-generating returns supported by structural strength and sectoral balance.
Investing in Europe
To achieve effective geographical diversification, investors may consider the “Undertakings for the Collective Investment in Transferable Securities” (UCITS) ETFs, which are widely listed across European exchanges. UCITS funds are known for their robust regulatory framework under the supervision of the European Securities and Markets Authority (ESMA), making them a popular choice among global investors seeking transparency, liquidity, and risk control. Below are several UCITS ETFs that are actively traded and offer exposure to key segments of the European market.
Source: Bloomberg Last Updated: 15 May 2025
When compared with the SPDR S&P 500 ETF Trust (SPY.US), which has registered a YTD decline of -0.31%, several European ETFs have demonstrated notable resilience, underscoring the relative strength of the region’s equity markets amid a challenging global backdrop.
For investors seeking to mitigate downside risk while maintaining equity exposure, incorporating European ETFs as part of a geographically diversified portfolio can provide a stabilising effect and an alternative source of returns. This approach is especially relevant in the current environment, where regional divergences in economic fundamentals and policy response have widened, creating new opportunities for active global allocation.
European Market Guide
POEMS has expanded its global investment offering with the launch of new European markets, providing clients with broader access to the continent’s key financial hubs. In addition to existing markets, investors can now trade equities listed in the United Kingdom, Germany, France, the Netherlands, Belgium, and Portugal, directly through the POEMS platform.
| Country | Exchange | DST(Singapore Time) | Non-DST(Singapore Time) |
| London Stock Exchange | 03:00pm – 11:30pm | 04:00pm – 12:30pm | |
| Deutsche Borse Xetra | 03:00pm – 11:30pm | 04:00pm – 12:30pm | |
| Euronext Paris | 03:00pm – 11:30pm | 04:00pm – 12:30pm | |
| Euronext Amsterdam | 03:00pm – 11:30pm | 04:00pm – 12:30pm | |
| Euronext Brussels | 03:00pm – 11:30pm | 04:00pm – 12:30pm | |
| Euronext Lisbon | 03:00pm – 11:30pm | 04:00pm – 12:30pm |
Source: POEMS Last Updated: 15 May 2025
Markets will be available for trading from Monday to Friday. You may refer to the table for Daylight Saving Time (DST) and Non-Daylight-Saving Time (Non-DST) trading hours.
For more information, you may visit the POEMS website or contact our experienced trading representatives for help. Please refer to the link provided here to view the pricing information for the relevant markets.
In Case You Missed It: Previous Market Journals
As we continue to navigate an increasingly complex global landscape, our past market journals have explored key themes shaping investor behaviour and market dynamics. These pieces provide valuable context and lay the foundation for our current outlook on Europe’s resilience. Highlights include:
- “Dive into Europe: New Markets, New Gains!”
- “Navigating Leveraged ETFs: Strategies, Risks, and Opportunities”
- “Euronext Paris: The Hidden Gem of Europe”
A deep dive into the benefits of investing in Euronext Markets
Understanding the power of leveraged shares and how to use them to your advantage!
How Euronext Paris Stock Exchange once overtook the London Stock Exchange as the biggest stock market in Europe!
There is an upcoming webinar, on 27 May 2025, where we’ll dive into the latest macroeconomic trends, uncover Europe’s strongest-performing sectors, and spotlight key Euronext-listed companies that combine stability with long-term growth potential. Whether you’re looking to diversify your portfolio or capture new income opportunities, find out why Europe could be your next smart move in today’s volatile global landscape. Register here
For more information about trading on European and US markets through POEMS, visit our website or contact our Night Desk representatives at 6531 1225, available from 3 PM onwards. Don’t wait, register your account today and take the first step toward accessing these exciting markets!
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About the author
Thng Xiao Xiong
Assistant Manager
Xiao Xiong is an assistant manager in the Global Markets Team specializing in UK markets. He is a graduate of the Singapore Institute of Technology with a bachelor's in Aircraft System Engineering. He has a strong interest in macroeconomics and options strategies
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