by Diana Mandia
(Reuters) – European scholarships ended clearly on Monday, driven by the defense sector while European countries are more and more inclined to increase their arms expenditure in the face of American requirements, while automobile values have been stimulated by Brussels projects concerning their emissions.
In Paris, the CAC 40 gained 1.09% to 8,199.71 points. In Frankfurt, the Dax took 2.64% and in London, the FTSE 100 increased by 0.70%.
The Eurostoxx 50 index ended up on an increase of 1.41%, the FTSEUROFRST 300 of 1.10%and the STOXX 600 of 1.07%.
The European Defense sector was on Monday in the ramp fires after European leaders gathered on Sunday in London declared themselves convinced of the need to increase their military spending in the face of threats of disengagement from the United States of the Old Continent.
The stoxx compartment dedicated to arms manufacturers has known its highest increase on Monday since November 2020, with a gain of more than 7.7%, while the twenty-seven must hold an extraordinary European Council on Thursday focused on military investments and support for Kyiv, the spirits still heated after the altercation between American and Ukrainian leaders on Friday in front of the cameras at the White House.
The expected increase in defense expenditure also had an effect on yields of state bonds in the euro zone, which have increased sharply, these plans being likely to require more loans.
Reuters also reported on Sunday that the parties seeking to create a new government coalition in Germany discussed a defense fund and another relating to infrastructure in the amount of several hundred billion euros each.
In addition to the defense, the automotive sector has also supported the indices, notably the German Dax, while the European Commission will offer to give car manufacturers three years to achieve new CO2 emissions objectives in order to avoid the ax of 2025 at a time when the industry is in difficulty in the face of Chinese competition and the slowdown in demand.
However, the feeling remains fragile at the beginning of a hectic week: the European Central Bank (ECB) must render its monetary policy decision on Thursday, the customs duties announced by Donald Trump against Mexico and Canada must be applied from Tuesday and new signs of weakness of the American economy weigh on the stock markets on the other side of the Atlantic.
A Wall Street
The main indices of the New York Stock Exchange turned to decline after data has shown that new orders in American factories fell in February, proof that US customs duties could weigh on production.
At the time of the fence in Europe, the Dow Jones fell by 0.30%, the Standard & Poor’s 500 lost 0.29%and the Nasdaq Composite abandons 0.49%.
The technology sector is at the top of the drops among the 11 sectors of the S&P 500 with a 1.5% drop, driven by a decline of 5% of the Nvidia flea giant.
VALUES
In Paris, Thales and Dassault Aviation increased by 16% and 14% respectively, supported by prospects on military spending in Europe.
In Milan, Leonardo climbed 16% and in Frankfurt Thyssenkrupp, Hensoldt, Rheinmetall and Renk jumped 10% to 22%. In London, Bae Systems took 14.5%.
Brussels’ announcement over a period of three years for car manufacturers in order to comply with the new CO2 emissions objectives has helped the main European manufacturers: Volkswagen took 1.7%, BMW 1.2%and Renault 1.4%.
The indicators of the day
In the euro zone, the pace which the manufacturing activity contacted has reached a lower in almost three years in February, according to the PMI S&P index Global/HCOB final for the sector published Monday, which suggests that activity in the manufacturing sector is perhaps stabilizing.
Inflation in the block has also slowed down in February, according to preliminary data published Monday by Eurostat, strengthening the betting bets according to which the European Central Bank (ECB) will reduce its 25 base points on Thursday.
In the United States, the price index paid by manufacturers has come up with its highest level for almost three years in February, while new orders in factories have dropped, according to the ISM manufacturer.
Changes
The dollar amplified its decline after the publication of the ISM manufacturing index.
The greenback loses 1.02% in the face of a basket of reference currencies, while the euro took the opportunity to advance from 1.14% to 1.0493 dollars, supported by the prospects of a peace agreement in Ukraine and a possible increase in defense expenses.
RATE
The yields of state bonds in the euro zone increased sharply on Monday, while the increase in defense spending will probably require larger European loans.
The yield of the German Bund at ten years took 10.2 base points at 2,4900%. The two -year -old has advanced 5.3 base points to 2.0680%.
In the United States, the yields of treasury bills are under pressure after the publication of figures in the manufacturing sector and with the approach of the deadline set by US President Donald Trump for the entry into force of customs duties.
The yield of ten -year -old Treasuries fell from 3.4 base points to 4.1948%.
OIL
Oil prices retreat with fears about the American economy and the entry into force of American customs duties.
Brent loses 0.21% to $ 72.66 per barrel and American light crude (West Texas Intermediate, WTI) 0.39% at 69.51 dollars.
To be continued on March 4:
(Some data may accuse a slight offset)
(Written by Diana Mandiá, edited by Blandine Hénault)
Copyright © 2025 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
