When people talk about European shares hitting a record, they are usually talking about the Stoxx Europe 600. It has been one of the quiet success stories of this year, setting fresh highs even on days when US technology stocks have stumbled. If you trade from the UK, it is worth knowing what the index is, what is inside it and how it differs from the FTSE 100.
What the Stoxx 600 is
The Stoxx Europe 600 is a stock market index that tracks 600 large, medium and small companies across 17 European countries, including the UK, Germany, France, Switzerland, the Netherlands, Italy, Spain and the Nordic nations. It is run by Stoxx, an index provider owned by Deutsche Börse.
Each company’s weight in the index depends on the value of its freely traded shares, so the biggest companies have the most influence. Our guide to market-cap weighting explains how that works.
What is inside it
The index is broad. It includes healthcare giants, banks, insurers, industrial groups, luxury goods makers, energy companies, consumer brands and a smaller technology sector than you would find in the US. UK companies make up a significant share, which means many familiar FTSE names are in there alongside companies such as Nestlé, ASML, LVMH and SAP.
That sector mix is important. Because Europe has fewer technology giants and more banks, industrials and defensive companies, the Stoxx 600 can behave very differently from the Nasdaq or even the S&P 500.
How it differs from the FTSE 100 and Euro Stoxx 50
The FTSE 100 covers only the 100 largest companies listed in London. It is heavy in energy, mining, banks and consumer staples, and many of its companies earn most of their money abroad. The Euro Stoxx 50, covered in our guide to the Euro Stoxx 50, tracks 50 leading companies in eurozone countries only, so it excludes the UK and Switzerland.
The Stoxx 600 is the broadest of the three. That makes it a good measure of European business as a whole, while the FTSE 100 and Euro Stoxx 50 give narrower views.
What moves it
Several forces matter. Interest rates from the European Central Bank and the Bank of England affect valuations and bank profits. The euro and the pound influence how much overseas earnings are worth. Energy prices weigh on industrial companies and households. Global growth, particularly in China and the US, drives demand for European exports such as luxury goods and machinery.
Sector rotation plays a big role too. When investors move money away from crowded US technology trades, Europe’s mix of value-focused sectors can benefit, which helps explain why the index has sometimes risen while US tech has fallen.
How traders use it
Many traders use the Stoxx 600 as a gauge of overall European risk appetite. A record high suggests broad confidence; a sharp fall across many sectors suggests wider worries. It is also tracked by futures, exchange-traded funds and contracts for difference, so it can be traded directly as well as used as a reference.
Watching which sectors lead the index can tell you more than the headline move. If banks and industrials are leading, investors are betting on growth. If healthcare and utilities are leading, they may be seeking safety.
A beginner’s takeaway
The Stoxx 600 is Europe’s broadest share index and a useful complement to the FTSE 100. Its mix of sectors means it does not simply follow Wall Street, which can make it valuable for understanding where money is flowing. Get to know its biggest sectors and you will make more sense of the headlines when it hits a record or slides.
If you want to see how your trading approach holds up across different markets, take our free Trader Assessment for a clear view of your strengths and gaps.
