European Shares Surge Amid Boost in Defense Spending

European shares increased to nearly record highs on Monday, driven by a boost in defense stocks following Europe's commitment to higher military spending. The STOXX 600 index rose, while the aerospace and defense index hit new peaks. Optimism in peace plans also contributed to market gains.

European shares soared, nearing record highs on Monday, as defense stocks rallied amid promises of increased military spending across the region. The pan-European STOXX 600 index was up 0.3% by 0932 GMT, poised to build on ten consecutive weeks of growth.

The European aerospace and defense index rose significantly by 6.5%, hitting a record high after EU leaders agreed to boost defense budgets and finalize a Ukraine peace plan to propose to the United States. Leading the charge, Rheinmetall surged 11.4%, while BAE Systems and Leonardo advanced by 13.5% and 11.6%, respectively.

However, US trade tensions cast a shadow with President Trump's tariff threats. Germany's 10-year Bund yield increased to 2.42%, and manufacturing saw the slowest downturn in three years. Meanwhile, Bunzl's shares fell following a 3.6% profit drop.

(With inputs from agencies.)