The economy, and corporate earnings, disappointed prior expectations, with the slowdown in global growth a particular headwind given the few internal drivers of growth within Europe.
The ongoing conflict in Ukraine has continued to give cause for concern alongside the recent Greek bail-out impasse, and these issues have all highlighted the fragile nature of Europe’s recovery, with many headwinds remaining as we move further into 2015.
While back in 2014 despite a modestly positive outcome overall, European equity markets certainly did not enjoy a blue riband year in terms of returns. Despite the headwinds currently faced by the European economy, there are also some positive factors to consider in the outlook for the markets this year.
European equities generally have experienced a very positive start to 2015 – the MSCI Europe ex-UK Index return of 7.7% (in euro terms) in January exceeded the 6.4% return in 2014 as a whole – as the much-anticipated programme of quantitative easing (QE) was announced by the European Central Bank.