Defence stocks powered European shares to a record high on Monday, after expectations mounted of higher military spending in the region, and the prospect of a Ukraine peace proposal boosted sentiment.
Leaders from major European economies agreed, over the weekend, to boost defence spending to show US president Donald Trump that the continent could protect itself.
Britain said there were several possible proposals for a Ukraine ceasefire after last week’s Oval Office rupture between Trump and Ukrainian president Volodymyr Zelenskiy.
Dublin
The Iseq index closed flat as it did not participate in the defence-led European gains. But it was a positive session for the banks, with AIB rising 1.2 per cent to €6.81 and Bank of Ireland rising 0.7 per cent to €11.42. Food group Kerry was another gainer, adding 0.7 per cent to finish at €102.00.
Kingspan dropped 2.3 per cent to €77.25, however, while Ryanair fell 0.4 per cent to €20.96.
London
A sharp rally in defence shares lifted the FTSE 100 up 0.7 per cent to record highs as investors cheered the possibility of a military spending surge in Europe. The mid-cap FTSE 250 gained 0.3 per cent.
The FTSE 350 aerospace & defence index jumped 8.1 per cent to a record high. The sector has soared over 25 per cent so far this year.
BAE Systems was the top gainer in the FTSE 100 with a 14.6 per cent jump, while Rolls-Royce Holdings climbed 4.4 per cent, tracking moves in defence shares across Europe.
Senior rose 8.5 per cent after the engineering firm said it was in advanced negotiations with a small number of parties for the sale of its aerostructures business.
Bunzl fell 8.8 per cent to its lowest since August after the distribution and services company reported a fall in annual profit.
Europe
The pan-European Stoxx 600 index closed up 1.1 per cent, at a record high, building on 10 straight weeks of gains.
Germany’s blue-chip index logged its biggest one-day jump since November 2022, and closed at a record high, alongside Britain’s benchmark index.
Rheinmetall surged 13.7 per cent to a record high, while Italy’s Leonardo advanced 16 per cent. France’s Thales and Dassault Aviation were up 16 per cent and 14 per cent respectively.
The European aerospace and defence index climbed 7.7 per cent to a record high, while the industrial goods and services sector gained 2.5 per cent.
Publican Noel Anderson on Grand Slam Bars, taking on Guinness and the rising price of a pint
A Reuters report that said parties in talks to form Germany’s new government were considering setting up a defence fund also boosted sentiment towards the defence companies.
Meanwhile, data showed Euro zone inflation dipped less than expected last month, but its most closely watched element dropped, sealing the case for another ECB interest rate cut on Thursday and for further policy easing in the coming months.
US
Wall Street’s main stock indexes slipped in the first hours of trading on Monday after data showed that new orders at US factories fell in February, while investors awaited details on tariffs on top trading partners that are expected to kick in at the end of the day.
Technology led declines among the S&P 500’s 11 sectors with a 0.9 per cent drop, dragged down by a 4.4 per cent fall in chip giant Nvidia.
Defensive sectors such as healthcare and consumer staples gained about 0.6 per cent each, while cyclical stocks such as materials and energy dipped after the data.
Tesla rose 3.1 per cent after Morgan Stanley reinstated the stock as “top pick” among US autos.
Crypto stocks such as MicroStrategy jumped 3.7 per cent, Coinbase rose 1.9 per cent after Trump announced a proposed reserve of digital assets.
Chipmaker Intel rose 3.6 per cent after a report that chip designers Nvidia and Broadcom were running manufacturing tests with the company.
Additional reporting: Reuters
