Europe midday: Stoxx goes red; Defence stocks gain on Trump defence remarks

(Sharecast News) - European shares slipped further into the red on Thursday following a weaker session on Wall Street, although defence stocks rallied on geopolitical tensions as US President Donald Trump said he wanted to ramp up military spending and talked up an increasingly expansionist agenda.

The pan-regional Stoxx index snapped a recent run of gains and was down 0.4% to 602 points at 1205 GMT. Germany's DAX hit a fresh intra-day high of 25,222 before giving up the morning's gains.

US stocks pulled back on Wednesday after three days of solid gains sent the Dow and S&P 500 to new heights, with investors showing caution as geopolitical tensions ramped up and economic data mostly missed estimates.

Investors continued to digest US president's Donald Trump's controversial cross-border military operation on Venezuela at the weekend, which saw Venezuelan president Nicolas Maduro moved to a federal jail in New York on 'narco-terrorism' charges.

On Wednesday he said Venezuela would be "turning over" between 30 million and 50 million barrels of "sanctioned oil" and the proceeds would only be spent on US goods, while US Energy Secretary Chris Wright said America planned to oversee the sale of Venezuelan oil "indefinitely".

Later in the day US forces seized two tankers - one recently reflagged as Russian - accused of assisting Venezuela to break American sanctions.

In further developments, Trump renewed his focus on Greenland as his next potential target for American expansionism, claiming that annexing the region is a "national security priority" and then said he wanted to raise defence spending by 50% to $1.5tn.

He also lambasted the bosses of weapons makers, claiming they were taking massive salaries but not delivering products quickly enough to the US or its allies.

The White House said the US president was looking at "a range of options" to take over the semi-autonomous Danish territory and could potentially use military action to get what he wants.

Oil prices made slight gains, with Brent crude up 0.07% to $60.

In economic news, consumer sentiment remained subdued across the Eurozone at the end of last year, a long-running survey showed on Thursday, despite the unemployment rate nudging lower.

According to Eurostat, the statistical office of the European Union, the seasonally-adjusted unemployment rate was 6.3% in November, down from 6.4% in October. Consensus had been for no change.

Across the wider bloc, the rate was 6.0%, unchanged on the previous month. That compares to unemployment rates of 6.2% and 5.8% in the Eurozone and EU respectively in November 2024.

Meanwhile the European Commission's Economic Sentiment Index shed 0.4 points in December in the Eurozone, to 96.7, narrowly missing consensus for 97.

In equities news, defence stocks led the gainers, with BAE, Leonardo, Rheinmetall and Saab all higher.

Primark owner AB Foods slumped more than 11% after the conglomerate issued a profit warning as retail and US foods sales struggled amid weak consumer confidence.

Reporting by Frank Prenesti for Sharecast.com