LONDON — European stock markets edged higher on Monday as global investors focused on the U.S. Federal Reserve’s monetary policy decisions this week.
pan-european Stocks 600 Last seen in London at 1:12 p.m. (8:12 a.m. ET), major regional stock exchanges and sectors were mixed, just above the flatline.
The Federal Reserve is widely expected to cut key interest rates at its final meeting of the year, with traders pricing in a roughly 87% chance of a 25 basis point cut this Wednesday, when the central bank concludes its two-day meeting, according to the CME FedWatch tool.
The Fed’s decision will be a catalyst for other central banks, which will hold their final policy meetings of the year this week and next. The Swiss National Bank announced its latest policy update on Thursday, with interest rate decisions expected to be announced next week from the Bank of England and the European Central Bank on 18 December.
The jury is still out on whether the BOE will lower its benchmark interest rate at its meeting, but the ECB is widely expected to keep rates on hold. The Bank of Japan is also scheduled to hold its last policy meeting for 2025 on December 19th.
Defense stocks lead European benchmarks, Lenk says line metal And Hensoldt tops the index. The names moved 5.7%, 2.8%, and 1.3%, respectively. The Stoxx600 Aerospace and Defense Index was last up 1.1%.
This comes after Citi upgraded Lenk from Neutral to Buy.
“We expect European defense spending to continue to increase regardless of the resolution of the Ukraine conflict, as Europe seeks to deter aggression through increased military capabilities,” analysts at the investment bank said in a note.
Citi’s view is driven by increased defense spending that Europe is encouraging the United States to do, and he doesn’t think that will change “regardless of which party is in the White House.” He also referred to the EU-wide mutual defense clause, which City hopes will play a role in the EU’s cohesion and commitment to NATO.
Keith Kellogg, President Donald Trump’s outgoing special envoy to Ukraine, said over the weekend that he was “very close” to a deal to end the war in Ukraine. The two main points of contention are the future of Ukraine’s Donbass region and the Zaporizhzhia nuclear power plant.
“Once those two issues are resolved, I think the rest will fall into place pretty well,” Kellogg said Saturday. “We’re almost there.”
Monday’s move also included the names of tech companies. Dutch chip-related names Vesi and ASMI AI continues to gain momentum, increasing by 4.5% and 3.9% respectively. ASML stock was recently up 1%.
In corporate news, Unilever’s spinoff ice cream business made its public debut on Monday. Magnum Ice Cream Company, which includes Magnum, Ben & Jerry’s, Wall’s and Cornetto, has a reference price of 12.80 euros ($14.93) on Amsterdam’s main public market. The stock opened at 12.20 euros, slightly below the base price of 12.80 euros. Secondary listing trading is also expected to begin in London and New York.
“As part of the Unilever family, we have become the world leader in ice cream,” Peter ter Kurbe, CEO of the new company, said on Monday ahead of its debut. “As an independent, publicly traded company, we will be more agile, more focused and more ambitious than ever.”
Unilever traded 4% lower in early trading, but was recently trading 0.8% lower.
Shares fell 2.3% following reports that French cosmetics brand L’Oréal will increase its stake in US skin care company Galderma from 10% to 20%.
Elsewhere, Elon Musk called for the European Union to be abolished after it imposed a €120 million fine on his social media company
There were no big gains in Europe on Monday. On the data side, Germany’s industrial production statistics will be announced.
Asia-Pacific markets traded mixed overnight as investors assessed data showing Chinese exports surged more than expected in November. U.S. stock futures were almost flat on Sunday night. U.S. markets rallied on Friday after a delayed September core consumer spending price index was weaker than economists expected.
It was one of the last major economic announcements ahead of the Fed’s policy meeting this week.
— CNBC’s Alex Harring and Kai Nicol-Schwarz contributed to this market report.
