European equities, banking sector in focus
We have already talked about how European equities are taking a little ‘revenge’ on US equities in this early 2025, and among the sectors that are doing particularly well is banking. Let’s see what the relative strength indicators tell us.
The European banking sector is going through a rather interesting phase, on the one hand the quarterly reports have shown solid results, on the other there is an air of consolidation with interesting deals underway (BBVA/Sabadel, Unicredit/Commerzbank, MPS/Mediobanca). All of which have increased investor interest. At one year, the banking sector has posted a gain of more than 40 percentage points and has also made double-digit progress in the last month.
Numbers that make the European banking sector one of the best in the STOXX 600. In the chart above, we observe how since the second half of 2024 the relative strength indicator has exploited the support of the long-term average, relaunching towards new highs, in a bullish trend that has characterised practically the whole of 2024.
A comparison with the ‘sister’ sector of insurance (graph above) shows a more lateral trend, with the indicator having broken through the 200-day average at the end of last year and now back to the highs since spring 2024.
