European stock markets saw a decline as EU leaders struggled to secure a €5 billion funding package for Ukraine, and investors were further deterred by the European Central Bank’s cautious outlook on the economy and inflation. Both the defense and automotive sectors experienced selloffs as a result. The pan-European Stoxx 600 Index dropped, along with France’s CAC 40 and Spain’s IBEX 35. EU leaders were unable to reach agreement on the ammunition aid package for Kyiv during a summit in Brussels, while a group of European nations, including Germany, Italy, and Poland, will meet in Paris to further discuss their position on Ukraine peace talks. ECB President Christine Lagarde emphasized the negative implications of U.S. tariffs, raising concerns about global stagflation. Defense and auto stocks retreated sharply, with declines seen in the likes of Rheinmetall, Airbus, BAE Systems, Rolls-Royce, Safran, Volkswagen, BMW, Mercedes-Benz, Porsche, and Stellantis. Carmakers are especially vulnerable to trade tensions due to their international exposure. The euro weakened against the U.S. dollar for the second consecutive day, despite optimism over the EU’s fiscal plans to boost defense spending.

Source: https://www.euronews.com/business/2025/03/21/europes-markets-lose-steam-amid-eu-deadlock-on-ukraine-trade-tension