€780 billion outflows Europe’s largest stock exchange in 2022

€780 billion outflows Europe’s largest stock exchange in 2022

The stock market is undergoing a phase of high volatility triggered by the dwindling economic fortunes globally. Indeed, the economic uncertainty has resulted in platforms like the Euronext Stock Exchange recording significant capital outflow.

In particular, data acquired by Finbold indicates that as of October 2022, the Euronext exchange had lost €780 billion in capital this year, to have a total market cap of €4.87 trillion. The value represents a drop of 13.8% from the €5.65 trillion market cap recorded in 2021, the highest valuation since 2014. Notably, last year’s valuation represented an increase of 28.12% from 2020’s figure of €4.41 trillion.

In 2019, the exchange had a valuation of €4.45 trillion, or a growth of 33.63% from 2019’s figure of €3.33 trillion, representing a slump of 11.44% from 2017’s value. Overall, between 2014 and 2017, the valuation rose steadily before dropping in 2018.

Elsewhere, LVMH Moët Hennessy Louis Vuitton remains the highest-valued company on Euronext, with a market cap of €321.58 billion as of October 2022. Merck and Co rank second at €237.24 billion, followed by oil giant Shell at €200.64 billion. ASML Holding ranks fourth with a market cap of €194.29 billion, while Caterpillar occupies the fifth spot at €176.02 billion.

Other high-valued companies on the platform include L’Oréal (€170.73 billion), TotalEnergies (€144.31 billion), Hermes Intl (€138.35 billion), Unilever (€121.51 billion), and Equinor (€117.23 billion).

Economic uncertainty triggers capital outflow

The research highlighted some of the drivers for the significant capital outflow from Euronext. According to the research report:

“The capital outflow from Euronext can be attributed to the prevailing economic uncertainty characterized by extended geopolitical tensions and stock market volatility alongside skyrocketing inflation and the threat of interest rate hikes. In this line, the factors have led to a fear of recession, with investors staying on the sidelines waiting for possible changes.”

For Euronext to regain increased activity, the exchange will heavily rely on how European economies recover from the current downturn.

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