US stock indexes fell slightly at the open on Monday following factory orders data, while investors await details on tariffs. European shares hit a record high, propelled by a surge in the defense sector driven by expectations of increased military spending and a potential Ukraine peace proposal.
Wall Street 's main stock indexes experienced a slight decline in the initial hours of trading on Monday. This downturn followed the release of data revealing a decrease in new orders at US factories during February. Investors are currently awaiting further details regarding tariffs on major trading partners, anticipated to take effect later in the day. Meanwhile, European shares reached a record high, driven by strong performance in the defense sector .
This surge is attributed to rising expectations of increased military spending within the region. Additionally, optimism surrounding a potential Ukraine peace proposal further bolstered market sentiment. Over the weekend, leaders from key European economies agreed to enhance defense spending, aiming to demonstrate to US President Donald Trump that the continent is capable of safeguarding itself. Britain indicated the existence of several possible ceasefire proposals for Ukraine following the recent diplomatic rift between President Trump and Ukrainian President Volodymyr Zelenskiy in the Oval Office. The Iseq index remained relatively stable, as it did not participate in the European gains led by the defense sector. However, the banking sector witnessed positive performance, with AIB rising by 1.2 percent to €6.81 and Bank of Ireland increasing by 0.7 percent to €11.42. Food group Kerry also saw gains, adding 0.7 percent to close at €102.00. In the UK market, a sharp rally in defense shares propelled the FTSE 100 to a record high, with investors welcoming the prospect of a surge in military spending across Europe. The mid-cap FTSE 250 also experienced a modest increase of 0.3 percent. The FTSE 350 aerospace & defense index soared by 8.1 percent, reaching a record high. This sector has witnessed a remarkable surge of over 25 percent so far this year. BAE Systems emerged as the top gainer in the FTSE 100, with a significant jump of 14.6 percent, while Rolls-Royce Holdings climbed 4.4 percent, mirroring the upward trend in defense shares across Europe. Senior rose 8.5 percent after the engineering firm announced it was engaged in advanced negotiations with a select group of parties for the sale of its aerostructures business. Conversely, Bunzl fell 8.8 percent to its lowest point since August following the distribution and services company's report of a decline in annual profit.The pan-European Stoxx 600 index closed at a record high, up 1.1 percent, extending its winning streak to 10 consecutive weeks. Germany's blue-chip index recorded its most substantial one-day gain since November 2022, also closing at a new high, mirroring the performance of Britain's benchmark index. Rheinmetall soared 13.7 percent to a record high, while Italy's Leonardo advanced 16 percent. France's Thales and Dassault Aviation also witnessed significant gains, rising 16 percent and 14 percent, respectively. The European aerospace and defense index climbed 7.7 percent to a new high, while the industrial goods and services sector gained 2.5 percent. A Reuters report suggesting that parties involved in forming Germany's new government were considering the establishment of a defense fund further fueled positive sentiment towards defense companies.Meanwhile, data indicated that Euro zone inflation dipped less than anticipated last month, but its most closely watched element decreased, solidifying the case for another ECB interest rate cut on Thursday and signaling further policy easing in the coming months
Wall Street Stock Market European Markets Defense Sector Factory Orders Tariffs Ukraine Inflation
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