18.02.202608:43:30UTC+00European Stocks Climb Toward Record Highs on Defense Rally

European equities advanced on Wednesday, moving closer to record highs, supported by strong gains in defense stocks and investor reaction to reports of a potential leadership change at the European Central Bank. The Stoxx 50 rose 0.4% to 6,050, while the broader Stoxx 600 added about 0.5% to reach 625.

Defense shares climbed more than 2%, led by BAE Systems, which jumped nearly 6% after reporting a stronger-than-expected increase in full-year operating profit. Sector sentiment was further bolstered by reports that Germany is considering acquiring a minority stake in KNDS ahead of its planned listing later this year.

In monetary policy news, the Financial Times reported that Christine Lagarde may step down as ECB president before France’s 2027 presidential election.

Elsewhere, Carrefour shares fell 5% after the retailer reported a decline in operating profit. Investors also awaited the release of the Federal Reserve’s meeting minutes for additional clues on the outlook for US monetary policy.