European shares saw a modest increase on Thursday, buoyed by gains in the automotive sector and industrial metal miners as investors looked ahead to the European Central Bank’s (ECB) policy announcement. The pan-European STOXX 600 index rose by 0.2% by 0704 GMT, continuing its upward trend from the previous day following the approval of a tax relief package in Germany, which enhanced investor confidence. Despite the positive movement, caution prevailed among investors as they awaited the ECB meeting, where a 25-basis-point interest rate cut is anticipated.
Industrial metal miners experienced a 0.6% increase, supported by stable copper prices, while automakers rebounded by 0.5%, recovering from earlier losses. However, uncertainty surrounding trade relations persisted, as U.S. President Donald Trump’s deadline for improved trade negotiations lapsed without any significant updates. In a related development, U.S. Defense Secretary Pete Hegseth announced that NATO would commit to defense spending amounting to 5% of GDP, ahead of a meeting with NATO defense ministers in Brussels.
Despite this reassurance, defense stocks across Europe struggled, with the relevant index declining by 0.3%. Among individual stocks, Eutelsat saw a significant drop of 13% following an announcement from South Korea’s Hanwha Systems, which revealed plans to offload its entire 5.4% stake in the satellite company for approximately 78 million euros ($85 million). Additionally, shares of London-listed Wizz Air plummeted by 22% after the budget airline reported an annual operating profit that fell short of analysts’ expectations.