European Shares Break Records with Defense Sector Boost

European shares reached a record high in early 2026, supported by strong performances in defense stocks, ending the previous year with robust gains. The STOXX 600 index rose 0.4%, benefiting from reduced interest rates and Germany's fiscal stimulus, amid pressures from global tariffs and challenges in the U.S. tech sector.

European shares soared to a record peak on Friday, marking the first trading session of 2026 with a robust close, as defense stocks spearheaded the rally.

By 0820 GMT, the comprehensive STOXX 600 index had increased by 0.4%, continuing its positive momentum from the previous week. The index's performance is indicative of investor confidence, fueled by declining interest rates and Germany's fiscal measures, as it navigates a challenging global economic landscape.

Despite a tumultuous year marked by trade disputes, European markets have shown resilience. Defense stocks rose 1.9%, supported by banking shares, which climbed 0.2%, and basic resources by 1.3%. Meanwhile, trading volumes remained thin, with Swiss markets closed for the day.