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European stocks extended their gains on Monday, maintaining strong momentum from the previous week. Investors are buoyed by growing optimism over a potential peace agreement in Ukraine, while also shifting their focus towards upcoming U.S. inflation data and tariff negotiations set for later in the week.
The pan-European STOXX 600 index rose by 0.3% at 0708 GMT, nearing its highest level since July 31, reflecting positive sentiment in the broader market.
Diplomatic support for Ukraine has been gaining traction ahead of a crucial Russia-U.S. summit this week. Ukrainian President Volodymyr Zelenskyy has received backing from both European nations and NATO as tensions remain high. The summit is set to bring together Russian President Vladimir Putin and U.S. President Donald Trump, with concerns mounting in Kyiv that both leaders could negotiate terms that could end the ongoing 3.5-year conflict on their own terms. Trump, who is scheduled to meet Putin in Alaska on Friday, indicated that a potential deal could involve a “swapping of territories” for mutual benefit.
The possibility of a peace deal has had a notable impact on German defense stocks. Shares of Rheinmetall (ETR:RHMG) fell by 3.7%, while Renk and Hensoldt saw declines of 3% and 2.1%, respectively.
Meanwhile, Orsted (CSE:ORSTED), the Danish wind farm developer, plunged 22% after the company announced a plan to raise 60 billion crowns ($9.4 billion) through a rights issue, citing challenges in the U.S. offshore wind market.
Northern Data also experienced a decline of nearly 3% after U.S. video platform and cloud services provider Rumble disclosed it was considering a $1.17 billion offer for the German AI cloud company.
As markets keep a close watch on global developments, particularly in Ukraine, traders are also preparing for crucial economic data releases later in the week that could influence the broader market trajectory.
