European Stocks Soar to Record Highs, Driven by Tech and Defence Gains

European stocks reached record highs as tech and defence shares boosted the STOXX 600 index. The positive market sentiment continues from 2025, influenced by falling interest rates and German fiscal measures. The FTSE 100 hit a psychological milestone of 10,000 points, indicating strong investor confidence.

European stocks began 2026 with record highs, propelled by robust performances in tech and defence sectors. The STOXX 600 index climbed 0.7% to 596.14 points, nearing the 600 benchmark as markets reopened post-New Year festivities. This marks the index's third consecutive weekly gain.

2025 concluded as the most successful year since 2021, boosted by decreasing interest rates, German fiscal stimulus, and a shift from overvalued U.S. tech stocks. Despite market turbulence from tariff announcements by U.S. President Donald Trump, investors ultimately benefited from a strong rebound from April lows.

London's FTSE 100 made headlines by surpassing the 10,000-point threshold. Nick Saunders, CEO of Webull UK, noted the psychological impact of this milestone, highlighting investor willingness to engage the market despite high valuations. In sector performance, ASML led tech gains with a 7% rise, while defence stocks outpaced all sectors with a 3.3% increase.