European markets resumed a march higher to around record levels on Tuesday, bolstered in particular by defense stocks, as investors eye a crucial meeting between U.S. and Russian officials on achieving a deal to end the war in Ukraine.
As of 03:08 ET (08:08 GMT), Germany’s DAX climbed 0.1%, the FTSE 100 in the U.K. increased by 0.2%, and France’s CAC 40 edged up 0.1%.
U.S.-Russia talks sideline Europe
Geopolitical tensions remain a focal point as U.S. officials hold discussions with Russia over ending the Ukraine war, excluding Kyiv and European leaders from negotiations.
In response, European leaders convened an emergency summit in Paris on Monday, where they suggested that the region could bump up military spending and become the main guarantor of Ukraine's security. Analysts have noted signals from the Trump administration that the U.S. may no longer be relied upon to backstop the continent's defense.
Defense stocks gained, extending a prior surge on Monday. BAE Systems (LON:BAES) in the U.K., Leonardo in Italy, and Sweden's SAAB all traded higher, as well as Rheinmetall (ETR:RHMG) and Thyssenkrupp (ETR:TKAG) in Germany.
Capgemini shares fall amid revenue dip; IHG buys Ruby and boosts profit
The advance in European shares was limited by Capgemini (EPA:CAPP). The French IT consulting group posted a 1.9% drop in revenue for 2024, mainly due to challenges in the manufacturing sector.
Still, Capgemini's operating margin remained stable at 13.3%, supported by its cloud, data and artficial intelligence services. Generative AI accounted for 5% of Capgemini's fourth-quarter bookings.
Meanwhile, InterContinental Hotels Group (LON:IHG) (IHG) announced that it had acquired European city-center chain Ruby. Alongside the purchase, IHG reported a 10% rise in operating profit to $1.12 billion (£890 million) for 2024. IHG also announced a 10% dividend increase and a $900 million (£719.4 million) share buyback program.
However, shares in the company were dragged lower by a higher-than-anticipated projection of adjusted interest expense in 2025.
Crude oil prices rise following drone attack on Russian pipeline
Brent crude prices climbed, building on the previous day's gains, after a drone strike on an oil pipeline pumping station in Russia caused a reduction in flows from Kazakhstan. But the gains were capped by expectations that supply levels out of Russia could increase in the near future should a Ukraine peace deal be secured.
By 03:08 ET, the Brent oil contract had risen 0.3% to $75.41 per barrel, while West Texas Intermediate oil futures were up 1% to $71.44 per barrel.
