By Avinash P and Johann M Cherian
Feb 18 (Reuters) – The STOXX 600 rose 0.8% to hit a record high on Wednesday as defence and banking shares gained while investors assessed corporate updates and reports of leadership changes at the European Central Bank.
The pan-European index was trading at626.36 points by 0945 GMT, with all major regional benchmarks in the black.
The defense sector climbed 2%, with BAE Systems adding nearly 2.6% after reporting a better-than-expected jump in full-year operating profit, as global demand swelled its order backlog to a record 83.6 billion pounds ($113.40 billion).
The broader sector also gained after a report on Tuesday said Germany was preparing to acquire a minority stake in KNDS, the Franco-German maker of the Leopard tank, ahead of its planned listing this year.
Meanwhile, a Financial Times report said Christine Lagarde plans to step down as president of the European Central Bank before the 2027 French presidential elections.
“We expect a limited impact of the new ECB president as EU leaders historically have aimed to strike a balance within the ECB’s executive board between doves and hawks,” analysts at Danske Bank said in a note.
“Even with the early departure, EU leaders have plenty of time to discuss and select a new president as part of the large shift taking pace in ECB top positions the coming two years.”
The central bank has left interest rates steady over the past couple of meetings and the focus is now on if inflation could undershoot its 2% target as the euro continues to strengthen.
Sentiment was also stabilizing this week after a global selloff since late January hurt multiple sectors over AI- disruption concerns. Banks rose over 1% each, rebounding from sharp losses in the week before.
Among others, Glecore climbed 3.2% after the miner announced it would return $2 billion to shareholders despite reporting slightly lower earnings.
Mediobanca added 6.8% after Monte dei Paschi di Siena (MPS) said it will take full control of the lender, ending weeks of uncertainty over the future of the merchant bank.
An 8.6% drop in Bayer limited gains, after the German pharmaceutical firm said it had reached an agreement worth as much as $7.25 billion to resolve tens of thousands of lawsuits claiming that its Roundup weedkiller caused cancer.
Chemicals and foods ingredients maker IMCD tumbled 14% after fourth quarter results missed expectations, while Swiss dental implant maker Straumann gained 7.7% after strong forecasts.
(Reporting by Avinash P and Johann M Cherian in Bengaluru; Editing by Sherry Jacob-Phillips and Nivedita Bhattacharjee )
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