European equities advanced on Wednesday, led by gains in the defence sector after the UK-based defence contractor BAE Systems reported stronger-than-expected results. The STOXX 600 index was 0.4% higher at 624.15 points as of 0813 GMT, with most regional benchmarks trading in positive territory.
Defence stocks were the day’s top performers, rising 2.2% in aggregate. BAE Systems contributed noticeably to that move, with its shares up nearly 6% following a better-than-expected increase in full-year operating profit. The company also said its order backlog reached a record 83.6 billion pounds, equivalent to $113.40 billion, reflecting rising global demand.
The wider defence sector received additional support from reports that Germany is preparing to take a minority stake in KNDS, the Franco-German maker of the Leopard tank, ahead of KNDS’s planned listing later this year. That report helped underpin investor interest in defence-related names across the region.
Macroeconomic focus centered on the European Central Bank after a Financial Times report indicated that Christine Lagarde intends to step down as ECB president before the 2027 French presidential elections. Market reaction to the report was relatively muted across regional assets, with investors not anticipating substantial policy shifts solely due to a change in personnel.
On the corporate front, Europe’s largest food retailer Carrefour reported a decline in operating profit, a development that sent its shares down 5% on the session. By contrast, Swiss dental implant maker Straumann saw its shares rise 6.2% after forecasting 2026 sales growth in the high single-digit percentage range.
Trading remained broadly cautious as participants balanced company-specific developments with headlines about ECB leadership. Currency information included in market updates showed $1 equals 0.7372 pounds.
Market snapshot:
- STOXX 600: +0.4% at 624.15 points (0813 GMT)
- Defence sector: +2.2%
- BAE Systems: shares up nearly 6%; order backlog at 83.6 billion pounds ($113.40 billion)
- Carrefour: operating profit down; shares -5%
- Straumann: shares +6.2%; 2026 sales growth guidance in high single-digit percentage range