European defence stocks surged to record highs on Monday as political leaders in the region called for an emergency summit on the Ukraine war, amid growing calls from the United States to increase military spending for security, Reuters reports.
According to Reuters, the pan-European STOXX 600 index rose by 0.4 per cent, led by a nearly four per cent surge in defence and aerospace stocks. Analysts attribute the rise to a significant increase in defence budgets, which they have termed a “supercycle” for the industry.
The managing director at Erlen Capital Management, Bruno Schneller, stated that a resolution to the Ukraine conflict could positively impact Europe’s economy, boosting consumer confidence, reducing energy prices, and easing financial conditions.
Meanwhile, European banks climbed 1.2 per cent, reaching 17-year highs, supported by an increase in bond yields.
French President Emmanuel Macron hosted an emergency summit on Ukraine, following reports that Europe would not participate in Saudi Arabia’s peace talks this week. In response, Britain announced its readiness to deploy peacekeeping troops if a peace deal is reached.
U.S. markets were closed on Monday for the Presidents Day holiday, but S&P 500 and Nasdaq futures both rose by 0.2 per cent.
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