The EURO STOXX 50 represents the most important European stock index. Learn more about the index here. At the end of August 2018, the news made headlines that, in addition to the energy group Eon, Deutsche Bank would also lose its place in the EURO STOXX 50 as of September 24, 2018. This represents a painful break in the history of the financial institution, which was once considered a global player. The reason for its removal from this European index is the sharp drop in market capitalization, which is a consequence of the continuous decline in the value of Deutsche Bank shares, and currently stands at only around 17 billion euros (source: Finanzen100, Jan. 29, 2019).

Being sorted out of the EURO STOXX 50 means an enormous loss of reputation for Deutsche Bank - after all, the tradition-rich financial institution and Germany's only systemically relevant bank will then no longer belong to the elite circle of the 50 most important listed European companies. In this situation, the fact that the major Italian bank Unicredit suffered the same fate in 2016 should provide little comfort. Unlike Deutsche Bank, however, the Rome- and Milan-based bank is making good progress with its restructuring efforts. For this reason, observers also do not consider it out of the question that Unicredit could succeed in rejoining the EURO STOXX 50 in the next few years. In contrast, Linde, the renowned producer of gases, could look forward to being included in the EURO STOXX at the end of September 2018.

The composition of the EURO STOXX 50

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"As a European share index, the EURO STOXX 50 brings together all listed groups that are prominent in the euro currency area. It is made up of the most important European blue chips, for which the term blue chips is also commonly used."

The EURO STOXX 50 has been in existence since February 26, 1998. STOXX Ltd, a subsidiary of Deutsche Börse AG, is responsible for calculating and publishing the values of the EURO STOXX. The EURO STOXX 50 is quoted on the basis of the index base, which was set at 1,000 points on the basis of the values on December 31, 1991. The calculation for comparative purposes was made back to 1986. Currently, the EURO STOXX 50 includes such major European groups as BNP Paribas, ING Group, Unilever, Santander and Orange, while the German carmakers BMW, Daimler and Volkswagen are also represented in the index. In addition, it includes a number of other important German stock corporations, including Bayer, SAP and Telekom.

The significance of the EURO STOXX 50

The performance of this index reflects the entire European stock market and thus also the economic situation or the expectations that investors have with regard to future economic development in the euro zone. The EURO STOXX 50 forms the basis of many index funds and certificates. Inclusion in or removal from this index usually has a direct impact on the share price of the respective stock. This is because fund managers have to buy or sell the newly included or dropped stocks on a large scale in order to track the index.

The requirements for inclusion in the EURO STOXX 50

The EURO STOXX 50 provides a condensed picture of the most intensively traded, largest stocks in the euro zone. For this reason, it contains only stock corporations that are held by a large number of different shareholders and are therefore in free float. The basis for the classification as a significant European top 50 stock company is provided by the market capitalization. Every September, the analysts responsible for the EURO STOXX 50 review the composition of the index. For this purpose, they draw up a selection list of the 60 stock corporations with the highest market capitalization from the EURO STOXX TMI, the comprehensive European index.