European Shares Rally as Financial and Defence Stocks Surge

European stocks rose on Wednesday, driven by strong performances in the financial and defence sectors. Financial heavyweight stocks led the way, with notable gains for Partners Group and EQT. Defence firms also benefitted from President-elect Trump's demand for more NATO spending. Meanwhile, market caution lingered amid high bond yields.

European shares made gains on Wednesday, propelled by surges in financial and defence stocks. Heavyweight financials contributed to the rise, with the STOXX 600 index climbing by 0.3% and hitting its highest mark since mid-December.

The defence sector also rallied, responding positively to U.S. President-elect Donald Trump's call for increased NATO spending. Stocks like Dassault Aviation, Rheinmetall, and Leonardo each saw over 4% gains following the announcement.

Healthcare and banks also showed modest growth, while investors remained cautious due to high bond yields and upcoming U.S. policy changes under Trump's administration.

(With inputs from agencies.)