Stock values of European defense firms experienced a significant boost on Monday as London and the European Union aimed to increase military expenditures amidst uncertainties regarding the United States’ dedication to Ukraine and NATO.
BAE Systems saw a surge of 14 percent, contributing to London’s FTSE 100 index reaching a new record high, continuing a trend of milestones in recent months.
The French defense company Thales gained 15 percent, while its German counterpart Rheinmetall rose 14 percent during afternoon trading.
“Europe is uniting in support of Ukraine, making it difficult to imagine defense stocks not benefiting from a prolonged period of demand,” remarked Neil Wilson, an analyst at TipRanks.
European Commission President Ursula von der Leyen emphasized on Sunday the need for Europe to “urgently rearm” as continental leaders convened in London for discussions on the Ukraine crisis.
“It’s crucial that we enhance our spending… and prepare for the worst,” she added.
This announcement follows British Prime Minister Keir Starmer’s recent commitment to raise UK defense spending to 2.5 percent of the nation’s economy by 2027.
In Germany, the coalition parties aiming to form the next government are reportedly planning to invest hundreds of billions of euros into defense and infrastructure upon taking office, according to a report from the Bild newspaper on Sunday.
The DAX soared over three percent in afternoon trading, achieving a new record high, with automotive shares climbing following the EU’s indication that it would allow manufacturers more flexibility in meeting lower CO2 emissions goals.
– Focus on Tariffs –
Wall Street opened positively, with investors attentive to any last-minute agreements to avert the impending tariffs on Mexico, Canada, and China set to take effect on Tuesday.
Trump confirmed a 25 percent tariff on goods from Mexico and Canada, along with an additional 10 percent on Chinese products starting this week.
“The overall market is reacting to hints that Canada and Mexico may receive some reprieve from tariffs,” commented Briefing.com analyst Patrick O’Hare.
O’Hare noted that statements from Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have fueled optimism that both countries might avoid the full 25 percent tariff.
Asian stock markets generally rose on Monday, with investors eyeing a prospective Chinese stimulus initiative while also preparing for the impact of US tariffs.
While Hong Kong and Shanghai markets lost early gains ahead of the crucial Chinese parliamentary session starting Wednesday, Tokyo ended the day with a 1.7 percent increase.
Chinese markets were lifted partly by a report released on Saturday indicating that manufacturing activity rebounded in February after a decline in the previous month.
Hong Kong benefitted from the successful IPO of the bubble-tea and beverage firm Mixue Group, with its shares surging by 40 percent.
In other news, the cryptocurrency market showed signs of stability following recent volatility.
Trump announced on Sunday a potential list of five cryptocurrencies under consideration for a new US “strategic reserve,” leading to a notable surge in their values and partially reversing a recent downturn.
This announcement triggered a widespread rally in the cryptocurrency market, which had experienced a sharp decline days earlier due to Trump’s tariff threats and other controversies affecting the sector, which had shaken investor confidence in these volatile assets.
– Key Statistics as of 1430 GMT –
New York – Dow: UP 0.2 percent at 43,924.08 points
New York – S&P 500: UP 0.2 percent at 5,938.35
New York – Nasdaq Composite: UP 0.4 percent at 18,914.59
London – FTSE 100: UP 0.9 percent at 8,890.13
Paris – CAC 40: UP 1.6 percent at 8,244.41
Frankfurt – DAX: UP 3.0 percent at 23,228.10
Tokyo – Nikkei 225: UP 1.7 percent at 37,785.47 (close)
Hong Kong – Hang Seng Index: UP 0.3 percent at 23,006.27 (close)
Shanghai – Composite: DOWN 0.1 percent at 3,316.93 (close)
Euro/dollar: UP at $1.0486 from $1.0384 on Friday
Pound/dollar: UP at $1.2694 from $1.2584
Dollar/yen: UP at 150.82 from 149.52 yen
Euro/pound: UP at 82.61 pence from 82.51 pence
West Texas Intermediate: UP 0.5 percent at $70.10 per barrel
Brent North Sea Crude: UP 0.5 percent at $73.18 per barrel
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