European shares marked a record closing high, boosted by defence stocks as investors priced in the likelihood of increased military spending in the region, following growing US pressure.
The pan-European STOXX 600 index ended up 0.5 per cent at 555.42 points, its highest ever closing level, with the aerospace and defence index leading sectoral gains with a 4.6 per cent jump, its biggest one-day jump since Russia invaded Ukraine in February 2022.
Defence stocks jumped across Europe as investors priced in the likelihood of increased military spending in the region.Credit: Bloomberg
The blue-chip FTSE 100 closed 0.4 per cent higher while Germany’s DAX jumped by 1.3 per cent, Britain’s FTSE 100 gained 0.4 per cent and France’s CAC 40 added 0.1 per cent. US markets were closed on Monday for a holiday.
The Australian sharemarket is set to edge higher, with futures pointing to a rise of 15 points, or 0.2 per cent, at the open. The ASX lost 0.2 per cent on Monday.
The RBA meets on Tuesday, with the central bank expected to cut interest rates for the first time since 2020.
Shares of defence companies such as Italy’s Leonardo gained 8.1 per cent, Sweden’s Saab AB jumped 16.2 per cent and Britain’s BAE Systems advanced 8.9 per cent, while German conglomerate Thyssenkrupp, which is looking to spin off its warship division TKMS, soared 19.8 per cent to its highest in more than a year.
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Head of the EU executive Ursula von der Leyen also said the European Commission will propose exempting defence from EU limits on government spending, at a time when US President Donald Trump has asked European members of security group NATO to finance their own defence against a potential Russian attack.
European leaders met in Paris for an emergency summit on Ukraine after US officials suggested Europe would have no role in any upcoming talks aimed at ending the conflict with Russia.
