Europe: Shares muted as markets await Ukraine talks after US-Russia summit

EUROPEAN shares were subdued on Monday, ahead of key meetings between Ukraine, European leaders and US President Donald Trump, following a Russia-US summit that ended without an immediate agreement.

The pan-European Stoxx 600 index closed 0.1 per cent up at 554.01, after logging a second straight weekly gain on Friday.

Ukraine’s Volodymyr Zelensky will meet Trump along with other European leaders in a bid to draw out a peace deal that will not favour Moscow.

Trump met with his Russian counterpart Vladimir Putin on Friday and agreed that a peace deal should be worked upon without a ceasefire.

Europe’s index tracking aerospace and defence stocks was up 0.7 per cent, after falling in the last session. UK’s Babcock gained 5.2 per cent after RBC initiated the engineering company at “Outperform”.

“If we can get to a peace agreement, the market would likely take that positively, but it remains unclear at this stage, given that the two sides seem quite far apart,” said Kiran Ganesh, multi-asset strategist at UBS Global Wealth Management.

“We don’t have a lot of clarity on how they (important market catalysts) might turn out, so the market has been quite directionless.”

Most sectors on the benchmark Stoxx 600 were lower, with a 1.6 per cent and 0.5 per cent decline in miners and heavyweight banks weighing the most.

Novo Nordisk jumped 6.6 per cent after the drugmaker’s weight-loss drug Wegovy received an accelerated approval by the US Food and Drug Administration to treat a serious liver condition.

Separately, it announced it was offering its diabetes drug Ozempic for US$499 per month to eligible patients in the US.

The gains boosted the healthcare sector up 1.4 per cent, logging its eighth session of gains. The sector took a beating this year, on uncertainty around Trump’s pharma tariffs, but is making a recovery.

Most regional bourses also closed lower, while UK’s FTSE 100 managed to eke out a 0.2 per cent gain.

The Federal Reserve’s annual Jackson Hole symposium later this week will be in focus, where Chair Jerome Powell and other policymakers will talk economic outlook and the central bank’s policy framework.

Ganesh said that investors will be looking out for any candidates who might position themselves more dovish-ly on monetary policy as the Trump administration considers a new Fed Chair.

Vestas shares soared 15 per cent, topping the Stoxx 600 after the US Treasury released guidelines for the qualification of wind and solar subsidies, offering clarity for projects through 2030.

Other renewables also gained, with EDP Renonvaveis surging 6.2 per cent, while Orsted and RWE both gained 1 per cent each.

Commerzbank fell 3.2 per cent, the most among banks, after Deutsche Bank downgraded the stock to “hold” from “buy”. REUTERS