Volkswacht Bodensee - European defence stocks soar as govts ramp up military spend

BAE Systems surged 14 percent, helping London's benchmark FTSE 100 index to a record high, the latest in a series over recent months.

French defence group Thales won more than 16 percent and German peer Rheinmetall rallied 15 percent.

"Europe is rallying round Ukraine and it's hard to see defence stocks not enjoying years of orders," noted Neil Wilson, analyst at TipRanks.

European Commission chief Ursula von der Leyen warned on Sunday that "we urgently have to rearm Europe" as leaders from the continent met in London for crisis talks over Ukraine.

"It's now of utmost importance we increase spending ... it's important we prepare for the worst," she added.

It came after British Prime Minister Keir Starmer last week pledged to boost UK defence spending to 2.5 percent of the economy by 2027.

In Germany, the two parties hoping to form the next government are planning to plough hundreds of billions of euros into defence and infrastructure when in power, the Bild newspaper reported Sunday.

The DAX jumped 2.6 percent, setting a record high with shares in carmakers jumping after the EU signalled it will give them greater leeway in meeting lower CO2 emissions targets.

- Tariffs watch -

Wall Street's main indices fell, with investors watching for any last-ditch deals to ward off the levies hitting Mexico, Canada and China due to come into force on Tuesday.

Trump has confirmed 25 percent tariffs on products from Mexico and Canada, and further imposed another 10 percent on Chinese goods from this week.

"Tariffs have been weighing on investors' mind in some shape or form since the election," said Art Hogan of B. Riley Wealth Management.

He added that the uncertainty of their imposition has loomed over markets: "That clearly is what weighed on markets the most in February, and it weighed on consumer sentiment."

Asian stock markets largely gained Monday, with investors eyeing a potential Chinese stimulus package as well as bracing for US tariffs.

Hong Kong and Shanghai stock markets shed early gains ahead of the key Chinese parliamentary meeting that opens on Wednesday, while Tokyo closed up 1.7 percent.

Chinese stocks had been boosted in part by data released on Saturday that showed manufacturing activity grew in February after a dip the previous month.

Hong Kong was helped by the blockbuster IPO of bubble-tea and drinks giant Mixue Group, which saw its shares jump 40 percent.

Elsewhere, the cryptocurrency sector was steadier after huge volatility in recent days.

Trump on Sunday named five cryptocurrencies under consideration for a new US "strategic reserve", sending their values skyrocketing and partly reversing a recent slump.

His announcement helped spur a broad rally among cryptocurrencies, which had plummeted days earlier as Trump's tariff threats and new scandals affecting the sector shook investor confidence in the highly volatile assets.

- Key figures around 1630 GMT -

New York - Dow: DOWN 0.3 percent at 43,717.32 points

New York - S&P 500: DOWN 0.3 percent at 5,937.20

New York - Nasdaq Composite: DOWN 0.5 percent at 18,

London - FTSE 100: UP 0.7 percent at 8,871.31 (close)

Paris - CAC 40: UP 1.1 percent at 8,199.71 (close)

Frankfurt - DAX: UP 2.6 percent at 23,147.02 (close)

Tokyo - Nikkei 225: UP 1.7 percent at 37,785.47 (close)

Hong Kong - Hang Seng Index: UP 0.3 percent at 23,006.27 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,316.93 (close)

Euro/dollar: UP at $1.0500 from $1.0384 on Friday

Pound/dollar: UP at $1.2708 from $1.2584

Dollar/yen: UP at 150.18 from 149.52 yen

Euro/pound: UP at 82.61 pence from 82.51 pence

West Texas Intermediate: DOWN 0.7 percent at $69.29 per barrel

Brent North Sea Crude: DOWN 0.5 percent at $72.46 per barrel

burs-rl/cw

J.Marty--VB