The year 2025 witnessed a significant rally across major European stock indices, with Italy's FTSE MIB Index leading the charge. The FTSE MIB soared by over 30%, outperforming its German (DAX) and French (CAC 40) counterparts. The index rose to €45,000, marking a roughly 40% increase from its low point in April 2025.
Key drivers for the FTSE MIB's performance included standout performances from specific companies. Shipbuilder Fincantieri was the index's top performer, with its stock jumping 140% as demand for commercial and defense ships surged. The company reported a backlog of 100 ships worth over €61.1 billion, with revenue rising 20% to €6.7 billion and EBITDA jumping 40% to €461 million. Telecom Italia's stock also surged by 107%, supported by revenue growth of 2.3% to €10 billion in the first nine months and a significant narrowing of its net loss.
Other major gainers in the FTSE MIB included Iveco Group, which rose 98% following a €3.8 billion buyout of its truck business by India's Tata, and defense contractor Leonardo, whose stock soared 90% amid increased European defense spending. Leonardo secured over €18.2 billion in new orders, boosting its backlog to €47.3 billion.
Simultaneously, the UK's FTSE 100 Index experienced a strong bull run, jumping nearly 22% in 2025 to reach a record high. This occurred despite economic challenges such as higher US tariffs, elevated taxes, inflation, and slow growth in the UK.
The FTSE 100 rally was heavily fueled by soaring commodity prices. Fresnillo's stock skyrocketed 446% as gold and silver prices hit record highs. Endeavour Mining rose 170%, and copper miner Antofagasta jumped 106%. Other mining giants like Rio Tinto, Glencore, and Anglo American also posted gains.
UK banking stocks were another major contributor. Standard Chartered rose 85%, while Lloyds, Barclays, NatWest, and HSBC saw gains between 51% and 80%. Banks benefited from the Bank of England maintaining higher interest rates to combat inflation, which boosted net interest margins. The sector was further supported by the UK government's decision to avoid implementing windfall taxes.
Defense contractors also performed exceptionally well within the FTSE 100. Babcock International rose 147%, Rolls-Royce jumped 102%, and BAE Systems gained 50%, all benefiting from increased defense spending across Europe.
