European shares flat amid caution after previous losses

The pan-European STOXX 600 closed flat at 575.5, following Monday’s industrials-driven decline

European shares struggled to find direction on Tuesday as caution lingered in the wake of the previous day’s losses, while Bayer surged on the U.S. administration’s backing for measures to curb lawsuits related to its Roundup weedkiller.

The pan-European STOXX 600 closed flat at 575.5, following Monday’s industrials-driven decline.

Bayer climbed more than 12 per cent to a near two-year high after the Trump administration urged the U.S. Supreme Court on Monday to take up the company’s bid to curtail thousands of lawsuits claiming its Roundup weedkiller caused cancer.

The stock helped keep the broader healthcare index afloat, up 0.2 per cent, offsetting losses from Wegovy maker Novo Nordisk, which dropped 2.3 per cent.

Banks extended their winning streak to a seventh session, gaining 1.1 per cent. Banco Santander’s 1.4 per cent gain was the biggest boost, after it sold a 3.5 per cent stake in subsidiary Santander Bank Polska, which dropped 5.8 per cent.

Erste Group added 3.7 per cent after Barclays upgraded the Vienna-based bank to “overweight” from “equal-weight”, citing positive growth prospects in Central and Eastern Europe.

The banking sector is both a safe haven and likely to benefit from interest rates remaining high. Spain is often the outlier, it’s mainly due to the financial sector, said Nick Saunders, CEO of trading platform Webull UK.

The bank-heavy Spanish IBEX 35 index outperformed peers, closing up 0.5 per cent and near a record high. Germany’s main index was up 0.5 per cent and the French benchmark shed 0.3 per cent.

Defence companies were in focus, with arms makers Rheinmetall and Hensoldt jumping nearly 3 per cent, rebounding from the previous day’s losses.