Jan 12 (Reuters) – European shares ended Monday’s session at a record high, although gains were small as the U.S. government’s threat to indict Federal Reserve Chair Jerome Powell renewed investor concerns about central bank independence.
The prospect that U.S. President Donald Trump might be able to force through lower interest rates drove up the price of non-yielding gold, which is also benefiting from safe-haven demand as geopolitical tensions are high.
Germany’s DAX (.GDAXI), opens new tab added 0.6% to finish at a record high and logged a 10-day winning streak, its longest since August 2024. Most other regional bourses ended flat.
VOLATILITY INDEX RISES TO ITS HIGHEST IN MORE THAN A MONTH
The market is grappling with geopolitical risks, including the U.S. capture of Venezuela and violence in Iran. Defence stocks (.SXPARO), opens new tab rose 0.5%, extending gains to seven straight sessions.
Reflecting investor nervousness, the Euro STOXX Volatility index (.V2TX), opens new tab rose 0.68 points to 16.2 – its highest in over a month.
Swissquote senior market analyst Ipek Ozkardeskaya said she expected investment flows to continue into European stocks.
“The sectors that are going to be in focus again are going to be mining stocks due to the debasement trade rising prices of hard commodities including gold, silver, copper or any other hard commodity,” she said.
BREWING AND AUTO SECTORS ALSO IN FOCUS
In corporate news, Heineken (HEIN.AS), opens new tab slid 4.1% to its lowest level in three months after the Dutch brewer announced that its CEO Dolf van den Brink will step down.
Investors weighed quarterly results from the auto sector. Porsche (P911_p.DE), opens new tab shares dropped 6% on concerns that current estimates for the luxury carmaker’s results may be too high, while Volkswagen <VOWG_p.DE, opens new tab> lost 1.3% as vehicle deliveries fell 4.9% in the fourth quarter of 2025.
Banks (.SX7P), opens new tab reversed earlier losses after Trump on Friday called for a one-year cap on credit card interest rates at 10%, starting on January 20, but did not provide details.
“A 10% ceiling on credit-card rates, roughly half today’s average interest rate, would upend the basic economics of the industry, forcing lenders to rethink how they manage risk and who they’re willing to lend to,” said Hargreaves Lansdown senior equity analyst Matt Britzman.
BE Semiconductor Industries (BESI.AS), opens new tab advanced 7.3% after the chip equipment supplier reported better-than-expected preliminary orders for the fourth quarter.
Shares of French biotech Abivax(ABVX.PA), opens new tab pared initial gains and ended up 5% after a media report said U.S. pharma giant Eli Lilly (LLY.N), opens new tab was still interested in buying the company.
Reporting by Niket Nishant, Avinash P and Johann M Cherian in Bengaluru; Editing by Janane Venkatraman, Shilpi Majumdar and Barbara Lewis
Niket Nishant reports on breaking news and the quarterly earnings of Wall Street’s largest banks, card companies, financial technology upstarts and asset managers. He also covers the biggest IPOs on U.S. exchanges, and late-stage venture capital funding alongside news and regulatory developments in the cryptocurrency industry. His writing appears on the finance, business, markets and future of money sections of the website. He did his post-graduation from the Indian Institute of Journalism and New Media (IIJNM) in Bengaluru.
