European Markets Trends Reach Record Highs as Defence Stocks Surge

By Evans Momodu
2 minute digest
Published 13:42 PM UK(GMT), 18 February, 2025


European stock markets hit record highs on Tuesday, fuelled by rising defence stocks and a shift of investor funds away from U.S. markets due to inflation and trade tariff concerns.

The pan-European STOXX 600 index reached 556.81 points, with defence and aerospace stocks climbing nearly 1%, following Monday’s 4.6% rally amid expectations of increased military spending.

U.S. markets, set to reopen after a holiday, showed signs of a muted session, as Federal Reserve officials hinted at delaying interest rate cuts. Rising inflation and concerns over Chinese AI competition also weighed on big tech stocks in the U.S.

Global Market Highlights:

• Investment Shift: European stocks saw their biggest weekly inflow since January 2023, as investors looked for alternatives to overvalued U.S. tech stocks.
• Government Bonds: Germany’s 10-year bond yields rose to 2.51%, influenced by EU Commission President Ursula von der Leyen’s call for increased support for Ukraine.
• Gold & Oil Prices: Gold climbed to $2,911 per ounce, with Goldman Sachs predicting a year-end price of $3,100.
• Meanwhile, Brent crude oil rose to $75.82 per barrel, following reports that OPEC+ may postpone planned supply increases.

Asian Markets & Currency Movements:

• China’s Stock Rally: Hong Kong’s Hang Seng Index reached its highest level since October, fuelled by AI stock gains and optimism following a meeting between President Xi Jinping and business leaders.
• Japan’s Nikkei gained 0.5%, driven by defence and banking stocks.
• Currency Trends: The euro strengthened to $1.0455, while the Japanese yen weakened slightly to 151.86 per dollar, with expectations of a future rate hike in Japan.

Source: Reuters