(MENAFN) European equities closed Wednesday with a varied performance, weighed down by a slump in defense stocks amid rising optimism for a ceasefire in Ukraine.

The pan-European Stoxx 600 index advanced 0.23%, or 1.28 points, settling at 559.09. However, the Stoxx Europe Aerospace and Defense index plunged 1.25%, extending Tuesday’s sharp 2.6% drop.

London’s FTSE 100 stood out with a robust 1.08% gain, finishing at 9,288.14 points.

Conversely, Germany’s DAX 40 declined 0.6% to 24,276.97 points, while France’s CAC 40 edged down 0.08% to close at 7,973.03.

Italy’s FTSE MIB 30 slipped 0.36% to 42,864.81 points, and Spain’s IBEX 35 dipped 0.08% to 15,292.1 points.

The euro traded at 1.1663 against the dollar, up 0.14% as of 1715 GMT.

Investors in Europe remain focused on diplomatic efforts to resolve the Russia-Ukraine conflict, as recent discussions involving US President Donald Trump, Ukrainian President Volodymyr Zelenskyy, and European leaders have fueled hopes for a ceasefire or an end to hostilities.

Economic data showed Eurozone annual inflation steady at 2% in July.

In contrast, the UK reported a rise in annual inflation to 3.8% for July, marking the highest level since January 2024.

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