European markets close higher ahead of German debt reform vote; QinetiQ down 21%

European stocks are closing the first session of the new trading week on a positive note, although investors will be looking to see if global market volatility continues amid continued trade uncertainty.

The pan-European Stoxx 600 index closed 0.79% higher, with all sectors bar chemicals in the green.

British defense firm QinetiQ shed nearly 21%, tumbling to the bottom of the Stoxx 600, after the company made a downward revision to its revenue outlook for the year.

European markets ended the week higher Friday after German lawmakers reportedly came closer to agreeing on reforming the country’s so-called debt brake rule. Media reports said Germany’s likely next chancellor Friedrich Merz had won support from the Greens party to hike public borrowing to allow an increase in defense spending.

The motion, which requires a change to the German Constitution, needs backing from two-thirds of the lawmakers elected to the country’s parliament. The Bundestag is expected to vote on the debt reform on Tuesday.

Investors will be keeping a close eye on U.S. markets this week after the Dow posted its worst week going back to 2023 last week, with investors grappling with President Donald Trump’s fast-changing tariff policies, on top of growing signs of economic weakness.

The uncertainty has many wondering whether the stock market correction could turn into a bear market. However, U.S. stocks were slightly higher Monday.

Asia-Pacific markets mostly climbed overnight, with investors keeping a close watch on Chinese equities after the Chinese government announced a “Special Action Plan to Boost Consumption” to revive consumption by boosting incomes.

Other measures announced on Sunday included plans to stabilize the stock and real estate market and raising the country’s birth rate.