European stock markets close higher with defense stocks leading charge

Shaking off a negative start, European stock markets pulled into the green on Thursday afternoon to close broadly higher, with the regional Stoxx 600 index up 0.56%.

Frankfurt’s DAX jumped 0.72%, despite divergence in some of its big-name stocks. Defense firm Hensoldt rose 8.3% amid wider sector gains, after Germany’s new defense minister said he backed Donald Trump’s call for NATO members to commit 5% of their GDP to security spending.

Industrial giant Thyssenkrupp dropped 12% as its results disappointed the market. Siemens shares also dipped slightly despite beating forecasts, while the company’s CEO Roland Busch told CNBC some prices would increase due to U.S. tariffs, but that there was little impact on the business overall.

In other news, data showed the U.K. economy grew by an unexpectedly strong 0.7% in the first quarter. The print will be welcomed by Finance Minister Rachel Reeves, but economists warned the momentum may not last.

The euro zone’s own first quarter GDP print was revised down to 0.3% from 0.4%, though wider figures on the labor market and industrial production were more encouraging.

And an EU official told CNBC’s Silvia Amaro that negotiations with the U.K. are moving at a “very slow pace” and have met “two major stumbling blocks.” EU and U.K. representatives meet for a summit on resetting post-Brexit relations next week, with trade, aid and defense on the table.

Friday is set to bring earnings from Swiss luxury group Richemont — an interesting sector of late due to the sprawling impact of tariffs; and a meeting of the European Political Community in Albania, ahead of elections in Portugal, Poland and Romania over the weekend.