European Shares Hit Record High Amid Central Bank Independence Concerns

European shares closed at an all-time high on Monday despite moderate gains. Concerns about central bank independence arose after the U.S. government threatened to indict Federal Reserve Chair Jerome Powell. Major gainers included precious metals firms, driven by geopolitical tensions and the potential for lower U.S. interest rates.

European equities achieved a record-setting close on Monday, albeit with minor increases, as potential U.S. government actions against Federal Reserve Chair Jerome Powell sparked investor anxiety over central bank autonomy. The STOXX 600 gained 0.2% to close at 610.95 points, with notable advances from precious metals firms like Aurubis and Fresnillo escalating due to elevated geopolitical tensions and the prospect of reduced U.S. interest rates intensifying gold's appeal as a safe-haven asset.

Germany's DAX also reached a historic high with a 0.6% increase, sustaining a ten-day winning streak, the longest since August 2024, although most other regional markets remained unchanged. Meanwhile, the Euro STOXX Volatility Index climbed to 16.2, its highest level in more than a month, reflecting heightened investor uncertainty amidst geopolitical strife including U.S. actions in Venezuela and unrest in Iran, leading to a 0.5% rise in defense stocks over seven continuous sessions.

In corporate movements, Heineken's shares fell 4.1% following CEO Dolf van den Brink's resignation announcement, while Porsche and Volkswagen experienced downturns due to underwhelming forecasts and declining deliveries. Additionally, BE Semiconductor Industries saw a 7.3% uptick after surpassing preliminary order expectations for the fourth quarter. French biotech Abivax ended the session up by 5% on reports of continued acquisition interest by U.S. pharmaceutical giant Eli Lilly.

(With inputs from agencies.)