European shares gain on Trump threat of Russia sanctions

European markets closed higher as signals of deepening Russia sanctions from the US boosted the defence sector. Meanwhile, after a Memorial Day break, US markets were buoyant on foot of positive developments in US-European Union trade negotiations, as well as a rebound in consumer confidence.

Dublin

The Iseq All Shares Index closed up 0.48 per cent at 11,416.40.

There were mixed results among banking with AIB up 1.05 per cent to €6.765 while Bank of Ireland was down 0.34 per cent to €11.775.

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The Government is also due to sell the State’s remaining AIB stock. Permanent TSB also closed higher, up 0.88 per cent to €1.715 at the close.

Housing stocks were strong with Cairn Homes up 2.75 per cent to €2.24 and Glenveagh finishing 0.11 per cent higher to €1.786. Ires Reit, which recently reported an improvement in net rental income margin, closed at €1.074, a gain of 1.13 per cent.

Tourism stocks fared less well on Tuesday – Dalata was down 0.18 per cent to €5.70 while Hostelworld saw a steeper decline of 3.13 per cent and a closing price of €1.55.

Kingspan were up 0.66 per cent to €76.20. Ryanair finished strong at €23.83, a gain of 0.42 per cent on the day’s trading.

London

British stocks closed higher in broad-based gains. The benchmark FTSE 100 was up 0.7 per cent while the mid-cap FTSE 250 gained 1.1 per cent.

The International Monetary Fund nudged up its growth forecast for Britain this year to 1.2 per cent, up from 1.1 per cent predicted in April. It also advised finance minister Rachel Reeves to continue reducing public borrowing.

Despite challenges from US tariffs, growth in UK is expected to rise to 1.4 per cent by 2026.

Among stock-related moves, aerospace and defence stocks gained 2.6 per cent after Mr Trump threatened additional sanctions on Russia.

BAE Systems boosted the FTSE 100 with a 3.1 per cent rise. Luxury brand Burberry gained 5.3 per cent, after Barclays upgraded the stock to equal-weight.

Specialty chemicals firm Elementis rose 11.4 per cent after agreeing to sell its talc business to IMI Fabi in a deal worth $121 million in enterprise value.

Jupiter Fund Management jumped nearly 10 per cent after Peel Hunt upgraded the money manager’s stock to add from hold. Precious metal miners fell 1.8 per cent tracking lower gold prices.

Europe

European shares closed higher with defence stocks boosting the market after US President Donald Trump threatened additional sanctions on Russia.

The STOXX 600 index closed 0.3 per cent higher, building on Monday’s 1 per cent rise.

EU policymakers have asked the bloc’s leading companies and chief executives for US investment plans to prepare for trade talks with Washington, according to two sources.

Technology shares rose 1.1 per cent, while industrials added 0.9 per cent.

In Germany, the DAX 40 ended 0.8 per cent higher, closing at an all-time high, after a survey indicated consumer sentiment is set to improve slightly heading into June. Euro zone government bond yields dipped.

FLSmidth rose 3.4 per cent after Goldman Sachs raised the mining and cement technology supplier’s rating to buy from neutral on expectations of higher margins.

New York

Wall Street stocks climbed after Mr Trump stepped back from his threat to impose 50 per cent tariffs on the EU, easing trade tensions and boosting sentiment as markets reopened after the Memorial Day break.

“The threat of 50 per cent tariffs on the EU is likely a negotiation tactic to force dialogue on difficult issues such as non-tariff barriers,” Glenmede analysts said in a note.

Most megacap and growth stocks jumped with Nvidia, up 2.9 per cent, leading gains. The AI bellwether is slated to report quarterly earnings after markets close on Wednesday.