LONDON — European stocks closed higher on Tuesday, building on positive momentum from earlier in the week.
The pan-European Stoxx 600 index ended the day provisionally around 0.2% higher, with the FTSE 100 and DAX indexes up almost 0.3% and 0.4%, respectively. The CAC 40 and FTSE MIB were up 0.6% shortly after the closing bell.
Defense stocks extended Monday's gains, with the Stoxx Europe Aerospace and Defense index ending the trading session around 1.1% higher, recovering from an earlier dip below the flatline. Switzerland's Montana Aerospace led gains through the day and closed more than 10% higher. Germany's Renk lost 0.6%, while Italian defense contractor Leonardo added 1.3%.
Regional defense stocks had been among the strong movers on Monday, amid the market debut of TKMS — the warship division spun off from Thyssenkrupp — and following another tense meeting between U.S. President Donald Trump and Volodymyr Zelenskyy over the weekend.
In corporate news, Danish pharmaceutical giant Novo Nordisk was 1.3% lower when markets closed. It came after the company announced it would hold an Extraordinary General Meeting on Nov. 14 to elect new members of its Board of Directors, following a dispute between existing members and Novo's controlling shareholder.
"Following dialogue with the Novo Nordisk Foundation regarding the future composition of the Board of Directors, it has not been possible to reach a common understanding," Chairman Helge Lund said in a statement on Tuesday.
Lund and several other members of the independent board will not stand for reelection at the upcoming EGM.
UK borrowing rises
In the U.K., official data released on Tuesday showed that public sector borrowing hit £20.2 billion ($27 billion) last month — the highest level for any September since records began in 1997. The figure brought public borrowing in the first half of the financial year up to £99.8 billion, up 13% from the same period a year earlier, marking the second-highest April to September borrowing figure since records began.
It was, however, in line with a forecast made in March by Britain's Office for Budget Responsibility (OBR).
It comes as the country's Finance Minister Rachel Reeves prepares to deliver her crucial Autumn Budget, which will impose measures aimed at bringing the government's expenditure bill and public debt under control.
Thomas Pugh, chief economist at consulting firm RSM UK, said in a note that the data was "a little bit of good news" for Reeves, given that spending was in line with forecasts, but he added that the figures "paint a picture of deteriorating public finances."
"Looking ahead to the budget in the autumn, we are pencilling in tax increases of around £30bn," he said.
Yields on U.K. government bonds, known as gilts, fell through the session before recouping some losses and closing above the flatline. The 10-year gilt was the exception, edging marginally lower.
The British pound ended the session around 0.2% lower against the U.S. dollar at around $1.338.
— CNBC's Nur Hikmah Md Ali, Hugh Leask and Pia Singh contributed to this market report.