European shares rose to an all-time high on Tuesday as defence stocks continued to climb on the likelihood of increased military spending in the region, although a Capgemini-led drop in IT stocks capped the gains.
The pan-European STOXX 600 index rose 0.2% to a record of 555.42 points, with the aerospace and defence index jumping 1%.
The sector surged 4.6% on Monday, its biggest one-day climb since Russia invaded Ukraine in February 2022, after European Commission President Ursula von der Leyen said the Commission will propose exempting defense from EU limits on government spending.
Defence stocks continued to gain on Tuesday, with Italy’s Leonardo rising 1.4%, Sweden’s Saab AB up 1% and Britain’s BAE Systems advancing 0.5%.
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German arms maker Rheinmetall ticked up 0.2%, while Thyssenkrupp, which is looking to spin off its warship division, advanced 2.7% after soaring nearly 20% on Monday.
On the flip side, Capgemini slid 6.2% after the French IT consulting giant reported a 2% annual decline in sales, though it surpassed expectations.
IHG, the owner of Holiday Inn, lost 1.3% following the announcement of its 2024 results.
Antofagasta gained nearly 1% after the miner’s annual core profit rose 11%.
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