European defence stocks hit record high as U.S. dollar gains on geopolitics

The STOXX aerospace and defence index reached a record high while the euro extended losses against the U.S. dollar amid geopolitical tensions; oil and wider markets showed mixed moves.

European defence and broader markets moved on a mix of geopolitical headlines and economic data. The STOXX aerospace and defence index climbed to a record high early in the session. Reports of seized Venezuela-linked tankers and a planned U.S.-Denmark meeting over Greenland were among the news items cited by traders. Investors were also watching U.S. economic data ahead of Friday's payrolls report. Key developments: - The STOXX aerospace and defence index rose nearly 2% early, marking a record high and a notable gain year-to-date and since 2022. - Two Venezuela-linked oil tankers were reported seized in the Atlantic, and U.S. Secretary of State Marco Rubio is scheduled to meet Danish leaders to discuss Greenland next week. - The euro extended losses versus the U.S. dollar, while oil prices recovered above $60 for Brent and U.S. crude was reported near $56.30 a barrel; safe-haven metals eased. - Markets were focused on U.S. labour data, with weekly jobless claims and the non-farm payrolls report due this week. Summary: Geopolitical developments have supported defence stocks and given the dollar strength while other asset moves were mixed. Near-term market interest is centered on U.S. labour data and the scheduled diplomatic meeting next week, and the outlook is undetermined at this time.