European Stocks Edge Higher As Commerzbank And Defence Shares Rally

The pan-European STOXX 600 index rose slightly on Monday, supported by a jump in Commerzbank shares and gains in the defence sector following U.S. President Donald Trump's call to reopen the Strait of Hormuz. The STOXX 600 edged up 0.1% to 596 points, recovering slightly after dropping nearly 6% from its February record high due to the conflict in the Middle East.

Commerzbank shares surged 3.5% after UniCredit initiated efforts to secure a 30% stake in the German lender, although the Italian bank’s shares eased 0.5%. Meanwhile, defence stocks gained approximately 1% as EU foreign ministers prepared to meet to discuss bolstering naval missions in the Middle East. Geopolitical tensions also lifted energy majors, with Shell and BP rising 1% and 2% respectively, as oil prices remained sustained above $100 per barrel.

Investors remain cautious as the war enters its third week, with Iranian restrictions on the Strait of Hormuz posing a significant risk to 20% of global oil and LNG trade. Attention is now focused on upcoming interest rate decisions from the Federal Reserve, the ECB, and the Bank of England, with central banks expected to hold rates steady in their first full meetings since the onset of the conflict.