German stocks have been powered by investors betting on stronger growth prospects and significantly higher spending on infrastructure and defense in Europe’s biggest economy, after politicians struck a landmark deal to try to reform existing debt restriction rules.
Automakers also received a boost following sharp declines Monday. The Stoxx autos index was up 2.5% after U.S. President Donald Trump on Wednesday announced a one-month tariff exemption for automakers.
Shares of Jeep and Dodge-maker Stellantis, one of the companies set to be most impacted by the duties, rose 2%.Shares of Air France-KLM
were up more than 32% after the airline group beat market expectations for full-year and fourth-quarter operating profit. Germany’s Lufthansa
was over 12% higher on its own annual results, which showed a decline in annual profit but also came in slightly ahead of consensus.
DHL Group, listed as Deutsche Post, popped 13% after announcing a 1 billion euro cost-cutting plan set to lead to a 8,000 head count reduction and an increased share buyback program.
European leaders are meanwhile meeting in Brussels for a special summit on defense as the region tries to maintain its support for Ukraine, find common ground on how to end the war and how to keep the U.S. on side.
Expectations of higher defense spending in across Europe have powered a 34.4% rise in the Stoxx Aerospace and Defense index in the year to date.
