European Stocks Vulnerable to Natural Gas Price Shocks: Citi Strategists

European stocks face growing risks if natural gas prices continue to climb. According to Citi strategists, the region's equity market and economy appear less vulnerable than during the 2022 energy crisis.

Natural gas prices have surged above €80 per megawatt-hour, their highest level since late 2022, amid escalating geopolitical tensions.

Past gas-price shocks suggest cyclical and energy-intensive sectors face the greatest pressure. Autos, travel and leisure, chemicals, and banks have historically underperformed during sharp increases in gas prices.

Commodity-related stocks, defensive sectors, and selected growth industries tend to fare better during such periods, leaving the impact across European equities highly uneven.