19.08.202516:05:32UTC+00European Stocks Close at 5-Month Highs

European stocks surged significantly on Tuesday, marking their highest levels since March, buoyed by optimism surrounding initiatives to resolve the conflict between Russia and Ukraine. The Eurozone's STOXX 50 climbed by 0.9% to reach 5,486 points, while the pan-European STOXX 600 increased by 0.7% to 558 points. Meetings held in Washington DC between European leaders, along with US and Ukrainian Presidents Trump and Zelensky, resulted in indications that security assurances to Ukraine may be forthcoming, contingent upon the cessation of hostilities. This sentiment boosted consumer discretionary companies, typically sensitive to risk perceptions, with LVMH and Kering witnessing a 3% increase. Similarly, Stellantis and Mercedes Benz showed gains of 3.2% and 2.7%, respectively, leading the automotive sector. On the broader market, Mediobanca saw an upward movement following its approval to acquire Banca Generali, positioning it as Italy's third-largest lender and thwarting Banca MPS's acquisition attempt. Conversely, the positive outlook for peace led to declines in defense sector stocks, with Rheinmetall, BAE Systems, and Thales each falling over 4%.