European shares reach record highs, driven by surge in defence stocks
European shares hit record levels on Monday, led by a strong performance in defence stocks, as political leaders in the region called for an emergency summit on the Ukraine war.
The pan-European STOXX 600 index jumped as high as 0.4%, as a gauge of defence and aerospace stocks surged over 3% to lifetime peaks, having already more than doubled in value since Russia invaded Ukraine three years ago, News.Az reports, citing Reuters.
Investors expect earnings in the industry to continue to rise strongly, driven by a significant surge in defence budgets to meet new security needs - which analysts have dubbed a "supercycle" for the sector.
Banks were also in demand, up 1.5% and flying to 17-year highs, helped by a rise in bond yields.
French President Emmanuel Macron will on Monday host an emergency summit on Ukraine after U.S. officials suggested Europe would have no role in any talks this week in Saudi Arabia aimed at ending the conflict.
The imminent threat of reciprocal U.S. tariffs has receded until April, but the risk that they might include levies based on value added taxes in other countries was a major worry.
The Financial Times reported on Sunday that the European Commission would explore tough import limits on certain foods made to different standards in an effort to protect its farmers, echoing President Donald Trump's reciprocal trade policy.
U.S. markets are shut on Monday for the Presidents Day holiday, keeping trading volumes lighter than usual.
Goldman Sachs has raised its outlook for Chinese growth and stocks, arguing that widespread adoption of AI could raise earnings per share by 2.5% a year over the next decade. It would also lift the fair value of Chinese equity by 15% to 20% and attract $200 billion of fund inflows.
Hong Kong equities retreated from recent highs on Monday, while Chinese stocks ended slightly up as investors started to pocket gains from a tech-driven rally while digesting news from President Xi Jinping's meeting with top tech bosses in Asia.
The Hang Seng index closed flat, China's blue-chip CSI300 index finished up 0.21%.
Tokyo's Nikkei also steadied with little change on the day after Japan reported surprisingly strong economic growth of an annualised 2.8% for the fourth quarter.
The gains were limited by a further rise in the yen to 151.65 per dollar. South Korean shares added 0.6% and Taiwan's (.TWII), opens new tab rallied 1.5%.
Similar news
