European Stocks Recover After Trump Ruled Out "Military" Option for Greenland
European stocks were under pressure on Wednesday (January 21st), but stabilized after US President Donald Trump signaled he would not use "military" force to acquire Greenland. The previously panicked sentiment suddenly calmed somewhat — although the market realized the drama wasn't over yet.
The Stoxx Europe 600 Index briefly fell as much as 0.9%, then gradually recovered and closed nearly flat. The trigger came from Trump's speech in Davos, in which he emphasized his desire for immediate negotiations on Greenland's acquisition, while ruling out the most extreme scenario of military action.
Trump even said that America might be "unstoppable" if it used force, but he wouldn't. The statement was enough to give investors a sigh of relief, as at least the worst risk to the market — military escalation — was temporarily off the table.
Even so, market participants remained cautious. Analysts believe Trump's statement temporarily eased tensions, but it didn't change the core issue: Trump remains determined to pursue Greenland, and the threat of tariffs on Europe remains. At the same time, news emerged that the European Parliament would postpone a vote on ratification of the trade agreement with the US—a sign that trade relations are not yet completely smooth.
In the sector, stocks linked to defense spending actually weakened, as did renewable energy stocks. Conversely, mining stocks were quite strong after copper prices rose, helped by Goldman Sachs' projection of continued metal flows to the US.
In individual stocks: Danone fell sharply after one of its baby formula products was pulled from shelves in Singapore. Barry Callebaut rallied after appointing former Unilever boss Hein Schumacher as its new CEO. Meanwhile, Burberry also surged due to increased sales during the usually crucial holiday period.
Source: Newsmaker.id
