European Stocks Rise Slightly, Iran Peace Stalemate Pressures Defense Stocks
European stocks closed slightly higher on Monday (May 11th), amid the latest impasse in peace negotiations between the United States and Iran. Market participants digested diplomatic developments that have yet to show any signs of improvement, after last week's optimism began to fade.
The pan-European Stoxx 600 index ended slightly higher, with bourses in London, Frankfurt, and Milan posting gains. However, the CAC 40 index in Paris fell sharply. Sector-wise, market movements were mixed with relatively limited volatility.
Defense stocks corrected after Middle East peace talks appeared to stall. German defense companies Rheinmetall and Renk closed lower, followed by Italy's Leonardo and Germany's Hensoldt. In the UK, Babcock International shares also closed in the red. This decline reflects a easing of the geopolitical risk premium that had previously boosted the sector.
Pressure on defense stocks emerged after US President Donald Trump called Iran's counter-proposal "unacceptable." According to Iranian media reports, Tehran is demanding an end to the war on all fronts and the lifting of sanctions as part of the deal. However, Trump has asserted on social media that such a response is "completely unacceptable."
Meanwhile, Israeli Prime Minister Benjamin Netanyahu stated that the war with Iran is not over, reiterating his commitment to curbing Tehran's nuclear ambitions. Meanwhile, Russian President Vladimir Putin called the protracted conflict in Ukraine "nearing an end," although reports of Russian drone attacks indicate tensions remain.
European markets are now moving cautiously, with investors weighing the still-high global geopolitical risks amid uncertainty over the direction of diplomacy in the Middle East and Eastern Europe. (Arl)
Source: Newsmaker.id
