Europe midday: Stoxx rebounds, but defence stocks weigh on German report

19th Aug 2024 11:13

(Sharecast News) - European shares swung into positive territory on Monday after a soft start, although defence stocks weighed on a report that Germany was pausing any new military assistance for Ukraine in its war against Russia.

The pan-regional Stoxx 600 index was up 0.12% to 512.74. With little in the way of corporate news to drive sentiment, traders have their eyes on speeches by Bank of Japan Governor Kazuo Ueda and Federal Reserve Chairman Jerome Powell later in the week.

''Stocks look set to struggle for a sense of direction at the start of a week dominated by ongoing conflicts and US domestic politics, while China's economic difficulties come into focus again," said Susannah Streeter, head of money and markets, at Hargreaves Lansdown.

Investors were assessing fresh data indicating a further fall in foreign direct investment in China, with an acceleration in the pace of the decline, Streeter added.

"Minutes from the Fed, out later this week, will be closely watched for further clues about the monetary policy path. But it will be Fed Chair Jerome Powell's speech on Friday at the central bankers meeting in Jackson Hole that will be the big draw, as he's expected to cement expectations for a quarter of a percentage point cut in September, and more reductions are likely to follow by the end of the year."

In equity news, trading platform Plus500 lifted full-year results guidance and reported a 13% jump in new customers for the first half of the year.

Defence stocks were down amid reports that Germany intends to curtail military assistance to Ukraine due to fiscal constraints. Rheinmetall, Saab, Leonardo, BAE Systems and Thales all fell on the news.

The Frankfurter Allgemeine Zeitung reported that the German government had imposed a moratorium on new military assistance to Ukraine.

Reporting by Frank Prenesti for Sharecast.com