European Markets Close On Firm Note As Defense Stocks Rally

(RTTNews) - European markets closed higher on Monday, led by strong gains posted by defense stocks amid rising prospects of increased military spending by European countries.

British Prime Minister Keir Starmer announced on Sunday that European leaders had agreed to draft a peace plan for Ukraine to present to the US, after a meeting between Donald Trump and Volodymyr Zelensky ended disastrously.

Investors also bet on a rate cut by the European Central Bank this week.

Worries about fresh tariffs by the Trump administration lingered but that did not deter investors from picking up stocks.

Defense stocks such as Rheinmetall, Thyssenkrupp, Airbus, BAE Systems, Rolls-Royce Holdings, Dassault Systemes and Thales posted strong gains.

The pan European Stoxx 600 climbed 1.14%. The U.K.'s FTSE 100 gained 0.85%, Germany's DAX jumped 2.68% and France's CAC 40 closed stronger by 1.45%, while Switzerland's SMI ended 1.25% up.

Among other markets in Europe, Belgium, Finland, Greece, Netherlands, Norway, Poland, Sweden and Turkiye closed with sharp to moderate gains.

Austria, Portugal and Spain posted modest gains. Denmark and Russia ended weak, while Iceland and Ireland settled flat.

In the UK market, defense stocks BAE Systems soared nearly 15% and Rolls-Royce Holdings climbed about 4.5%.

RightMove, St. James's Place, IMI, Haleon, Marks & Spencer, Antofagasta, Intermediate Capital Group, Convatec and Melrose Industries gained 2.2 to 4.2%.

Endeavour Mining, Beazley, Smith & Nephew, Rio Tinto, Prudential, Auto Trader Group, The Sage Group, Fresnillo, M&G, 3i Group, Weir Group, JD Sports Fashion, Compass Group and Schrodders also posted strong gains.

Bunzl ended down 8.8%. The distributor of non-food products posted statutory pre-tax profit of 673.6 million pounds for fiscal year 2024, down 3.6% from last year's 698.6 million pounds. Profit for the year declined to 501.0 million pounds or 148.7 pence per share from 526.2 million pounds or 156.0 pence per share a year ago.

On an adjusted basis, Bunzl's pre-tax profit was 872.9 million pounds, compared to 853.7 million pounds a year ago.

Severn Trent, BT Group, IAG, Sainsbury (J), National Grid, Spirax Group, United Utilities, Taylor Wimpey, Informa, British Land, Centrica and Croda International lost 1.2 to 2.7%.

In the German market, Rheinmetall zoomed nearly 16%. Airbus surged 5.8% and Bayer closed higher by about 5.7%.

Hannover Rueck, Commerzbank, MTU Aero Engines, Allianz, Deutsche Telekom, Daimler Truck Holding, Munich RE, HeidelbergCement, Volkswagen, Deutsche Boerse, Fresenius, Deutsche Post, SAP, Beiersdorf and Fresenius Medical Care rallied 2 to 3.5%.

Vonovia ended more than 3% down. Sartorius closed lower by about 1.7%.

In the French market, Thales closed with a hefty gain of over 16%. Teleperformance gained 5.6% and ArcelorMittal ended with a gain of 4.8%.

Dassault Systemes rallied 3.4%. Safran and Sanofi gained about 3.3% and 3%, respectively. Air Liquide, AXA, L'Oreal, BNP Paribas, Renault, Vivendi, Veolia, Edenred, Accor, Societe Generale and Eurofins Scientific advanced 1 to 2%.

Carrefour ended down by about 2.2% and Schneider Electric closed nearly 2% down. Unibail Rodamco, Engie, Kering and Michelin ended moderately lower.

A report from S&P Global said the UK manufacturing PMI fell to 46.9 in February from 48.3 in January, revised higher from preliminary expectations of 46.4.

A report from the Bank of England said net net mortgage approvals for house purchases in the UK, a key indicator of future borrowing, remained largely stable at 66,190 in January 2025, slightly down from a downwardly revised 66,510 in December but exceeding market expectations of 65,650.

Flash data from Eurostat showed Eurozone inflation eased slightly in February, with the harmoized index of consumer prices logging an annual growth of 2.4% in the month, after rising 2.5% in January. The rate was expected to ease to 2.3%.

Likewise, core inflation that excludes energy, food, alcohol and tobacco, slowed marginally to 2.6% from 2.7% in the previous month. This was also slightly above forecast of 2.5%. On a monthly basis, the HICP gained 0.5% in February.

The HCOB Eurozone Manufacturing PMI rose to 47.6 in February 2025, surpassing the preliminary estimate of 47.3 and improving from January's 46.6. While the sector remained in contraction, the downturn was the mildest since early 2023.

The HCOB France Manufacturing PMI rose to 45.8 in February 2025, exceeding initial estimates of 45.5 and up from 45.0 in January. While the sector remained in contraction, the downturn was the softest in nine months.

Data from S&P Global showed, the HCOB Germany Manufacturing PMI was revised higher to 46.5 in February 2025 from a preliminary of 46.1, compared to 45 in January. The data continued to indicate a severe contraction in the manufacturing sector, althoush the drop was the mildest in nearly two years.