European Markets Close On Firm Note; Defense Stocks Hog Limelight

(RTTNews) - European stocks closed broadly higher on Monday with those from defense companies hogging the limelight as leaders of European countries convened a meeting in Paris for talks on Ukraine and to ramp up regional security.

The emergency meeting of European leaders comes after the Trump administration announced that it was opening talks with Russia on ending the war with Ukraine without a European presence.

Shares of arms manufacturers and related companies rallied sharply as European policymakers pledged to increase defense spending amid concerns of lower US contributions to NATO security, ahead of talks between US and Russia delegations over a resolution in the war in Ukraine this week.

According to reports, French president Emmanuel Macron spoke with US president Donald Trump ahead of the meeting of European leaders.

Concerns about the potential impact of higher tariffs by U.S. weighed a bit and limited markets' upside.

The pan European Stoxx 600 climbed 0.54%. The U.K.'s FTSE 100 gained 0.41%, Germany's DAX ended stronger by 1.26% and France's CAC 40 edged up 0.13%, while Switzerland's SMI gained 0.27%.

Among other markets in Europe, Austria, Denmark, Finland, Greece, Iceland, Ireland, Poland, Spain and Sweden ended notably higher. Russia closed nearly 4% up.

Belgium, Netherlands and Norway closed modestly higher, while Portugal and Turkiye ended weak.

In the UK market, defence firm BAE Systems' shares rallied about 9%. Multi-national aero spacec and defence company Rolls-Royce Holding gained about 1.5%.

Schrodders, Barclays Group, Natwest, Haleon and Coca-Cola gained 2.4 to 3.5%. Reckitt Benckiser, Entain, Next, Melrose Industries, HSBC Holdings, Admiral, Pearson, 3i, Hikma Pharmaceuticals, EasyJet and Intercontinental Hotels gained 1 to 2%.

Lloyds Banking ended nearly 2.5% down. B&M European Value Retail, British American Tobacco, Phoenix Holdings, Unite Group, Airtel Africa, Segro, Vodafone Group, Fresnillo, Persimmon and BP lost 1 to 2.2%.

In the German market, shares of arms manufacturer Rheinmetall soared 15%, contributing substantially to market's rise. The stock surged amid reports the European leaders are considering a new defense spending package to assist Ukraine. Any big jump in Europe's defense budget is a positive Rheinmetall, which has already been seeing a surge in military orders.

Siemens Energy climbed about 3.75%. Munich RE, MTU Aero Engines and Deutsche Bank gained about 2.5%.

Hannover Rueck, Allianz, Porsche, Zalando, BMW, Beiersdorf, Fresenius Medical Care, Deutsche Telekom, SAP and Infineon advanced 1 to 2%.

Vonovia, Sartorius, Symrise, Puma, Commerzbank, Henkel, Covestro and Merck closed weak.

In the French market, Thales surged more than 7.5%, inline with defense stocks across Europe, on signs of higher military spending.

ArcelorMittal and Safran both gained more than 2%. Edenred, Danone, Vinci, Saint-Gobain, Pernod Ricard, Carrefour and Societe Generale also closed higher.

Vivendi ended lower by 3.4%. Teleperformance, LVMH, Hermes International and Michelin lost 1 to 1.6%.

Data from Eurostat showed the Eurozone's trade surplus narrowed to Euro 15.5 billion in December 2024 from Euro 16.4 billion in the previous year. Imports rose by 3.8% from the previous year to Euro 211 billion and exports increased by a softer 3.1% to Euro 226.5 billion.