European stocks touch record high, led by defense shares after Venezuela shock

European stocks kicked off the week on firmer footing, as U.S. military strikes on Venezuela stirred fresh geopolitical concerns and sent investors piling into defence industry stocks on Monday (January 5).

The advance, coming after a holiday lull, highlights expectations of structurally higher defence spending despite some recent weakness in the sector's stocks driven by speculation over a potential ceasefire between Russia and Ukraine.

The pan‑European STOXX 600 climbed as much as 0.6% to 599.65, a record high. The defence index rose 3.3% to its highest level in nearly three months.

Technology and basic resources were also up 2.3% and 2.1% respectively.

Germany's stock benchmark DAX too scaled a new record high, last up 1%, with defence manufacturer Rheinmetall RHMG.DE leading the index with a 7% gain.

At 11:30 a.m. (1030 GMT), the DAX was up 0.8% and stood at 24,736 points.

Production: Tilman Blasshofer and Michele Sani/Reuters