Europe midday: Ukraine peace talks hit defence stocks; Airbus slumps on software issue

(Sharecast News) - European shares started December on a negative note across the board, with defence stocks down as talks on a peace deal to stop the Ukraine war continued and Airbus shares slumping after the plane maker was forced to issue an emergency software update on all A320 jets. The pan-regional Stoxx 600 was down 0.42% to 574 points at 1204 GMT. Germany's DAX extended morning losses to slump 1.48%, Britain's FTSE 100 was flat and France's CAC 40 fell 0.79%.

American envoy Steve Witkoff was scheduled to visit to Moscow for talks with Russian President Vladimir Putin and other officials after Ukraine said it approved in principle a US-backed 19-point peace plan.

The plan is an amended version of an initial 28-point document, put together in secret by the US and Russia which heavily favoured Moscow. Meanwhile in Florida, Ukrainian and US officials, led by Secretary of State Marco Rubio, held more talks over the weekend described as "very productive".

Shares in arms makers Renk, Rheinmetall, Hensoldt and Thales all fell on the news.

On the macro front, US central bank policymakers are set to meet on December 9 and 10 to decide on interest rates, with bets increasing to 87% on a 25 basis point cut.

"Next week's Federal Reserve meeting is expected to announce an interest rate cut for the third meeting in a row, with the early indications of a new Fed Chair, to be announced shortly, likely to be a dove who will continue to ease monetary policy," said Interactive Investor head of markets Richard Hunter.

"With inflationary concerns having more recently taken something of a back seat, the Fed is likely to concentrate now on the other part of its dual mandate, with signs of weakness emerging across the labour market."

"Investors will also be seeking a boost from heightened consumer spending over Black Friday and Cyber Monday, where the early indications are that this annual retail windfall could reach record highs."

"With the consumer central to the health of the economy, this could put markets on a firm footing over December."

In other equity news, Airbus shares were hit after the aircraft maker had to issue a critical software update on its A320 model after warning that solar radiation could interfere with onboard computers.

Reporting by Frank Prenesti for Sharecast.com