German equities closed higher on Tuesday, lifting European markets in general after the parliament approved plans for a large spending surge, while investors awaited details from a call between US and Russian leaders with a potential Ukraine peace deal on the line.
The blue-chip index closed up 1 per cent after hitting an intraday record high. The domestically-exposed small-cap index climbed 3 per cent to a more than three-year high, while mid-caps were up 1.6 per cent.
Germany’s Bundestag approved the reforms that include a major rollback of the so-called debt brake to increase defence spending, and a €500 billion fund for infrastructure. They will be presented to the upper house on Friday.
The optimism around the reforms has resulted in a rally in defence stocks, the euro and euro zone yields in recent weeks, although they all pared gains after the vote.
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“It’s probably been a case of buy the rumour and sell the facts, where the German market has done so much better than everything else. There’s a little bit of profit taking,” said Lindsay James, investment strategist at Quilter.
Dublin
Ires Reit fell 0.9 per cent after the State’s largest private residential landlord said it had refinanced its existing €500 million revolving credit facility in a deal that will leave its annual interest rate at 3.8 per cent, unchanged from 2024.
AIB and Bank of Ireland trended up – by 1.4 per cent and 1 per cent respectively – along with many of Europe’s financials. Glanbia in contrast was down again, closing the session at €10.40. The Kilkenny-based food giant, which has a large US operation, has been struggling since an earnings downgrade last month.
Home builder Glenveagh was up again – rising by 1.6 per cent – following on from last week’s positive results.
Europe
The pan-European Stoxx 600 gained 0.6 per cent with European banks leading gains, up 2.5 per cent. The banks index touched its highest level since February 2011, on higher spending prospects.
Energy and automobile and parts shares followed, with most sectors ending the day in the green, as the European benchmark index outperformed Wall Street.
Investors also awaited details from a phone call between US President Donald Trump and Russian President Vladimir Putin as the U.S. attempts to convince Moscow to accept a ceasefire in its war with Ukraine.
Computacenter jumped 11 per cent after the technology and services provider said it was well placed for progress in 2025, with a strong order backlog across all regions.
Bollore lost 5.4 per cent after the French conglomerate reported full-year results. Siemens gained 1.2 per cent after the engineering company said it would cut 5,600 jobs from its flagship digital industries business.
London
The FTSE 100 rose on Tuesday while US stocks slipped, as markets looked ahead to interest rate calls from both countries’ central banks later in the week.
The Bank of England and the US Federal Reserve are poised to announce their latest decisions on interest rates, with traders expecting both to hold rates at their current levels.
In the UK, policymakers have been gradually cutting borrowing costs since August last year, easing pressure on some borrowers who have seen lower mortgage rates enter the market. But the bank’s governor, Andrew Bailey, has stressed a “gradual and careful approach” to reducing rates.
London’s blue-chip index rose 25 points to finish the day at 8,705, a 0.3 per cent rise. In company news, Close Brothers said it swung to a loss after setting aside £165 million (€196 million) in provisions for the motor finance commission scandal. Shares in the company slumped by 21.8 per cent after it posted a statutory pretax loss of £103.8 million for the six months to January 31, against profits of £87 million a year ago.
New York
Wall Street’s main indexes were lower on Tuesday on worries about the economic impact of US tariff policies ahead of a monetary policy decision from the Federal Reserve.
The Fed’s two-day rate-setting meeting kicks off on Tuesday, and expectations are that the central bank will keep interest rates steady, according to data compiled by LSEG.
Several US central bank officials have cautioned against hasty moves and said they would wait for data to see the impact of tariffs before making any policy shifts.
“I don’t think they (Fed) know exactly how this (trade policy) is going to play out,” said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company.
Markets were taking a pause after all three major indexes gained more than 2 per cent each over the past two sessions as investors capitalised on discounted US equities following last week’s sell-off.
The S&P 500 had tumbled more than 10 per cent from its February peak, signsignalling benchmark index entered a correction phase.
The blue-chip Dow is trading close to correction levels, while the tech-heavy Nasdaq confirmed it is in a correction on March 6th. In company news, Alphabet fell 3 per cent after the company said it would buy Wiz for about $32 billion (€29 billion) in its biggest deal as the Google parent doubles down on cybersecurity.
Nvidia declined 2.3 per cent. The company is expected to reveal details of its latest AI chip at its annual software developer conference.
Tesla fell 4.2 per cent after brokerage RBC trimmed its price target on the EV maker’s stock, flagging the company is losing market share in China and Europe. Other megacaps slid, with Amazon losing 1.8 per cent and Meta down 4.3 per cent. – Additional reporting by Reuters
