The pan-European STOXX 600 index extended its gains this Tuesday (25) with a boost in material and financial stocks, as investors continue to remain optimistic about prospects for a ceasefire in Ukraine and expectations of interest rate cuts in the United States.
The STOXX 600 closed up 0.91%, at 568.01 points.
The prospects of an end to the Russia-Ukraine war, which has lasted almost four years, continued to boost the STOXX 600, with the construction and materials sector increasing its appreciation, up 2.4%. Germany’s Heidelberg Materials jumped 6.6%, cement maker Buzzi rose 6.1% and rock wool maker Rockwool soared 4.5%.
On Tuesday, Ukraine signaled support for the framework of a peace deal with Russia, but emphasized that sensitive issues needed to be resolved in a meeting between Ukrainian President Volodymyr Zelenskiy and US President Donald Trump.
The defense sector rose 1%, after falling more than 5% in the last two sessions on expectations that the war in Ukraine is nearing an end.
The European Parliament approved a 1.5 billion euro ($1.7 billion) scheme to finance defense investment across the European Union and support Ukraine, while the United Kingdom separately committed to delivering more air defense missiles to Kiev in the coming weeks.
“Since last week, news about the peace dialogue has been going back and forth, but it looks like the Russians are not going to play along and the deal could simply fall apart. This means Europe still needs to spend more on defense, which would already be the case anyway,” said Chris Beauchamp, chief market analyst at IG Group.
Meanwhile, global markets were evaluating a mixed set of delayed U.S. data that largely kept intact expectations for a Federal Reserve interest rate cut in December.
The odds of an interest rate cut in December were 82.7%, according to CME’s FedWatch tool.
In Europe, the banking sector jumped 1.8%.
In LONDON, the Financial Times index advanced 0.78%, to 9,609.53 points.
In FRANKFURT, the DAX index rose 0.97%, to 23,464.63 points.
In PARIS, the CAC-40 index gained 0.83%, at 8,025.80 points.
In MILAN, the Ftse/Mib index increased by 0.95%, to 42,698.66 points.
In MADRID, the Ibex-35 index registered an increase of 1.08%, at 16,140.90 points.
In LISBON, the PSI20 index depreciated 0.03%, to 8,049.50 points.
