European markets close higher as defense stocks continue to rally

European markets closed higher on Tuesday, hitting another record high, as defense stocks continued to gain on expectations of higher national spending.

The pan-European Stoxx 600 closed 0.32% higher at 557.17 points, the latest in a series of records this month.

The Stoxx 600 Aerospace and Defense index, which also hit a record high during Monday's session, rose another 1%, with Polish defense equipment maker Lubawa jumping 14% and German defense manufacturer Renk Group gaining 2.7%.

Geopolitical tensions were firmly in focus on Tuesday as U.S. officials held talks with Russia to end the war in Ukraine. Officials in Kyiv and Europe were left out of the discussions.

European leaders held an emergency summit in Paris on Monday to discuss how to respond to the apparent decision to sideline Europe, and while they agreed on increasing defense spending, there was no alignment over whether to send peacekeeping troops to Ukraine after any peace deal.

Asia-Pacific markets mostly rose overnight as traders reacted to comments by Chinese President Xi Jinping on Monday, signaling support for the country’s private sector and urged businesses to “show their “talents.”

U.S. stocks rose Tuesday morning to kick off a holiday-shortened trading week.