European Markets Rally on Ceasefire Hopes and Interest Rate Speculation

European shares rose as optimism grew over a potential ceasefire in Ukraine and expectations of interest rate cuts in the U.S. The STOXX 600 index saw significant gains, led by materials and financial stocks, amid defense sector developments and mixed economic signals from delayed U.S. data.

The European stock market experienced a notable uptick on Tuesday, with shares in materials and financial sectors leading the charge in anticipation of a ceasefire in Ukraine and potential interest rate cuts by the U.S. Federal Reserve.

The pan-European STOXX 600 index concluded the day up by 0.91%, closing at 568.01. Major European indices such as Germany's DAX and France's CAC also saw gains, rising by 1% and 0.8%, respectively. This surge was fueled by expectations that the prolonged conflict between Russia and Ukraine might be drawing to a close, boosting European construction and materials stocks.

Additionally, the European Parliament's approval of a 1.5 billion euro defense investment scheme supported regional defense and bank shares. Meanwhile, mixed U.S. data maintained market anticipation of a December interest rate cut, further influencing global financial trends.

(With inputs from agencies.)