European Stocks Rise on Cheaper Oil, Defence Shares Lead Advance

European stocks rose on Wednesday as cheaper oil prices eased inflation concerns and boosted investors' confidence. The STOXX Europe 600 index gained about 0.4% to 645.04 in early trading, with most major regional markets moving higher.

The decline in Brent crude below $100 a barrel was driven by Saudi Arabia's decision to restart its East-West pipeline and resume exports from the Red Sea port of Yanbu. This development is particularly significant for Europe, where the Middle East conflict has pushed energy costs higher and complicated the European Central Bank's inflation fight.

Despite weaker crude prices, energy shares gained about 0.8%, showing that investors are not yet pricing a collapse in oil-company earnings. The more unusual part of Wednesday's move was the leadership of aerospace and defence stocks, which topped the STOXX 600 sector rankings.

Bank of America analysts expect European defence-industry revenue to grow about 15% annually through 2030, driven by demand for air defence, missiles, and radar. Saab, a Swedish aerospace company, was among the strongest performers in the sector, with its shares gaining due to strong order prospects.

Other companies in the sector, such as Exosens, also reported positive earnings catalysts. The company raised its 2026 guidance last week after expanding night-vision production capacity and seeing stronger demand for drone, counter-drone, and surveillance technology.