Key Takeaways
- European equities extended their gains in July, although performance varied widely across countries.
- Energy and financials drove the market higher, supported by strong gains in major oil companies and banks.
- The sharp fall in ASML weighed on the technology sector despite SAP’s strong performance.
The Morningstar Europe Index delivered a positive return in July, ending the month with a rise of 1.3% in euro terms, but with significant differences in returns from one country to another and a further divergence between value and growth stocks’ performance.
Among country benchmarks,- the Morningstar Norway Index rose the most, up 9.2%, thanks to its dominant index member Equinor EQNR, which gained 27.8% last month amid an oil price rally. On the flip side, the worst performer, the Morningstar Netherlands Index, was also defined by a dramatic move in its largest member, falling 8.4% as chip equipment champion ASML ASML fell 16.6%.
Value Stocks Continue to Outperform Growth Stocks
In July, value stocks outperformed growth stocks once again. The Morningstar Developed Europe Value Index returned 4.7%, beating the Morningstar Developed Europe Growth Index, which declined by 2.2%.
That pattern of value leading and growth lagging is consistent with the trend during 2026 so far, with value stocks returning 16.3% compared with 7.5% for growth stocks.
Which European Stocks Rose and Fell in July?
Energy was the most profitable sector in July, gaining 13.9% in euros. Large integrated oil companies, also called oil majors, contributed the most to the sector’s gains as the failure of the US-Iran ceasefire once more drove crude oil prices higher. Shell SHEL rose by 16.2%, TotalEnergies TTE by 12.3%, BP BP. by 19.2% and Eni ENI by 16.3%.
The financial sector also outperformed the market last month, rising by 5.1%. The standout stocks were HSBC HSBA, BBVA BBVA, Intesa Sanpaolo ISP and ING Group INGA, all up around 10% for the month.
The poor performance of the technology sector during July was driven by a steep 16.6% decline in chip equipment champion ASML. Its fall was only partly offset by the sector’s second largest member SAP’s SAP rise of 17.7%.
Another sector that underperformed the market last month was healthcare, with a loss of 2.0%. Here, Roche’s ROP gain of 5.3% was not enough to offset the fall in AstraZeneca AZN of 9.7% and Novo Nordisk NOVO B, down 2.6%.
Utilities also suffered a decline of 2.0% affected by the sharp rise in long-term interest rates across Europe. Spain’s Iberdrola IBE lost 3.5% and Britain’s National Grid NG. 3.9%.
