Europe open: Stoxx marches on as world tensions lift defence shares

(Sharecast News) - European shares set new records on Tuesday as geopolitical tensions continued to boost arms manufacturers. The pan-regional Stoxx 600 hit 556.8 in early trade, before settling back to be flat on the day at 555.38. Major bourses were mixed.

Investors are watching talks between US and Russian officials as they seek to impose a bilateral settlement to end the war in Ukraine, at the exclusion of the Ukrainians themselves along with the rest of Europe.

The US wants 50% of Ukraine's mineral rights while Russia wants to keep land it annexed after its unprovoked invasion in February 2022.

European leaders held an emergency summit in Paris on Monday to formulate their own response to US demands to ramp up defence spending and send peacekeeping troops to Ukraine if an armistice was signed. Shares in weapons makers spiked on the news.

UK Prime Minister Keir Starmer, speaking after the meeting, said he was prepared to consider putting British forces on the ground, alongside others, "if there is a lasting peace agreement", but said there had to be a US backstop "because a U.S. security guarantee is the only way to effectively deter Russia from attacking Ukraine again".

In equity news, German defence company Rheinmetall continued to gain, along with French rival Dassault and Italy's Leonardo.

German manufacturer Siegfried Holding slumped after results, while French IT firm Capgemini also tumbled after a fall in sales.

Reporting by Frank Prenesti for Sharecast.com