The continent-wide STOXX 600 index jumped back from its nearly 1% decline on Friday, marking its biggest one-day rise in close to three weeks.
Industrial stocks were the biggest boosts to the STOXX 600, up 1.9%. Defence companies were at the forefront, with the broader index up 2.8%. They recovered from Friday’s fall when news of a planned summit on the war in Ukraine jolted the sector.
“At the end of the day Donald Trump has not necessarily been successful in materially ending the war so far … so, that optimism is not on a strong footage to lead to a sustained sell-off across the defence sector,” Ipek Ozkardeskaya, senior market analyst at Swissquote Bank, said.
Rheinmetall rose 5.9%, Hensoldt climbed 7.9% and Renk added 6.8%.
Banks rose 1% on Monday, as U.S. banking stocks rebounded in the previous session following quarterly results from regional lenders that helped ease worries over credit risks.”The question is whether there are more skeletons in more regional US banking closets this time around and if so, what that means for broader risk,” analysts at Rabobank said.”Swap spreads have begun to back up the alarm bells already being rung in equities, but they appear to have settled as we head into the new week.”
Most major regional indexes were in the positive and France’s CAC 40 reversed earlier declines to end up 0.4%. S&P Global downgraded France’s rating a notch on Friday, warning that political instability could put the government’s efforts to repair its finances at risk.
Kering jumped 4.8% after the Gucci owner agreed to sell its beauty business to L’Oreal for 4 billion euros ($4.66 billion), leading broader gains on the French benchmark index. L’Oreal gained 1.2%.
BNP Paribas tumbled 7.7% after a U.S. jury found the French bank helped Sudan’s government commit genocide by providing banking services that violated American sanctions.
Meanwhile, Trump told reporters that he could lower tariffs on China as long as Beijing did “things” for the U.S., including resuming purchases of soybeans, also buoying sentiment.
This comes as Trump, last week, confirmed a planned meeting with Chinese President Xi Jinping in South Korea and as Treasury Secretary Scott Bessent is set to meet his Chinese counterpart this week.
British discount retailer B&M slumped 22.8%, recording its steepest one-day decline on record, after trimming its annual profit forecast.