European Markets Rise Amid Mining Deals and Greenland Tensions

European markets opened in positive territory on Friday, with the pan-European Stoxx 600 climbing 0.37% by early trading in London. Major indices, including the FTSE 100, CAC 40, and DAX, all showed modest gains, signaling investor optimism despite ongoing geopolitical uncertainties. Most sectors traded in the green, highlighting confidence in corporate earnings and strategic deals across the continent.

Investor attention was drawn to the mining sector as British firm Rio Tinto entered preliminary talks to acquire Swiss mining giant Glencore. If completed, the deal could create one of the world’s largest mining companies. Glencore shares surged nearly 8% following news of the potential merger, reflecting strong market enthusiasm. European oil stocks also saw gains, with BP, Shell, and TotalEnergies up by more than 1% amid early dealmaking optimism.

Defense stocks continued their upward trend for a fifth consecutive day, buoyed by U.S. President Donald Trump’s call for a 50% increase in military spending, aiming for a $1.5 trillion budget by 2027. Tensions over Greenland remain in focus, with Trump suggesting various measures to secure the island, a strategic location for U.S. security interests. European and Asian defense stocks alike reacted positively to these developments, with aerospace firms such as Rolls-Royce reaching fresh highs.

Meanwhile, the retail sector in the U.K. experienced mixed results. Tesco raised its end-of-year profit guidance for fiscal 2026 to £3.1 billion, reflecting strong Christmas food sales, while Sainsbury’s saw a 3.4% rise in underlying sales but shares fell nearly 5%, marking a weak performance within the European benchmark. Investors remain cautious as they weigh retail performance against broader economic signals.

On the political front, European leaders prepared to vote on a trade agreement with South America’s Mercosur bloc, amid concerns over potential competition for European agriculture. Key data releases in Europe, including Germany’s balance of trade, are expected today, while markets are also eyeing U.S. employment data for December. With global trade, defense, and mining headlines driving investor sentiment, European markets may continue to navigate both opportunities and geopolitical risks in the near term.

source: cnbc