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Europe open: US sabre-rattling hits rally, but defence stocks march on

Thu 08 January 2026 08:21 | A A A

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(Sharecast News) - European shares fell at the open on Thursday following a weaker session on Wall Street, although defence stocks again rallied on geopolitical tensions as the US seized two more oil tankers accused of breaking sanctions against Venezuela and officials openly talked about the annexation of Greenland.

The pan-regional Stoxx index snapped a recent run of gains and was down 0.05% to 604 points at 0837 GMT. Germany's DAX was the only major bourse in the green with a rise of 0.46% after hitting a fresh intra-day high of 25,222.

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.

Despite a positive start, the Dow finished 0.9% lower at 48,996.08 and the S&P 500 slipped 0.3% to 6,920.93, though the Nasdaq pushed 0.2% higher to 23,584.27.

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".

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 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

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