European Markets Kick Off Last Week of the Year Mostly Flat
LONDON — European stock markets opened the final trading week of the year showing little change. The pan-European Stoxx 600 index remained steady in morning trading, touching an intraday high of 589.61 early on.
The British FTSE started slightly higher, while France’s CAC40, Germany’s DAX, and Italy’s FTSE MIB saw minor declines. It’s interesting how these indices trend differently, isn’t it?
Meanwhile, European defense stocks declined after weekend peace discussions between President Donald Trump and Ukrainian President Volodymyr Zelenskiy. Notably, shares of Leonardo dropped by 4%, Lenk fell 3.1%, and Kongsberg, Hensoldt, Rheinmetall, and Saab each saw losses of around 2-3%. The Stoxx European Aerospace and Defense Index slipped by 1.6%. On a positive note, the mining sector managed to cover some of its losses, contributing a 1.2% rise by 10:30 a.m. London time (5:30 a.m. ET).
Jacob Pedersen, an analyst at Sidbank, mentioned that while defense stocks might take a hit due to these talks, investments in European defense are likely to ramp up significantly in the years to come. It feels a bit contradictory, doesn’t it? A potential pullback now might fuel more growth later.
“If we can get some peace, that’s definitely a potential positive for European stocks,” Pedersen shared on CNBC’s “Squawk Box Europe.”
On a different note, the French biotech firm Avivax rose by 3.8% during morning trading, finding its way among the top European blue-chip indexes. This company, known for its treatment aimed at ulcerative colitis, seems to be attracting some attention due to acquisition speculations.
Another highlight was London-listed miner Fresnillo, which climbed 3.4%. Its stock has skyrocketed over 400% this year, reflecting the surge in precious metals. Silver briefly topped $80 an ounce early Monday but has since retreated, currently trading around $75.34 per ounce. Gold also dipped 1.3% to $4,495 per ounce, while copper dropped 2.3% to $5.71 per ounce.
With the Christmas holiday approaching, trading volumes might be a bit lower this week, and some regional markets are set to close on Thursday for New Year’s Day.
As for the prospect of a peace deal in Ukraine, hopes seem to be dimming. Presidents Trump and Zelensky indicated some progress during their recent talks, but acknowledged that “one or two very thorny issues” remain unresolved.
Oil prices increased as investors mulled over the potential for a resolution to the conflict in Ukraine. U.S. crude rose by 1% to $57.34 per barrel, while the global benchmark Brent crude saw a similar increase, reaching $61.27 per barrel. Both had dipped around 2% the previous Friday.
President Trump had aimed for a peace agreement before Christmas, yet significant differences persist, particularly regarding the territorial concessions Russia wants and the security guarantees Ukraine is seeking.
After their discussions in Florida, President Zelensky announced that a consensus had been reached on roughly “90%” of a 20-point peace plan, emphasizing that both leaders were aligned on Ukraine’s security. However, Trump took a slightly more cautious stance, suggesting the deal was “close to 95%” complete.
No major earnings reports or data releases are expected in Europe on Monday, and in U.S. premarket trading, futures showed modest declines, with the S&P 500 down 0.2% and the Nasdaq 100 down 0.4% as of 5:30 a.m. ET.
