European stocks erased early losses to close near the flatline on Monday, remaining at the highest level in nearly two months as markets continued to assess how macroeconomic uncertainty may hamper support from lower rates by the ECB and deficit spending by major Eurozone members.
The STOXX 50 closed flat at 5427 and the STOXX 600 closed flat at 550.
The EU and the UK reached a provisional agreement on defence and security cooperation, fisheries, and youth mobility ahead of an EU–UK summit.
The deal could open the door for British firms to participate in major EU defence contracts, further supporting the sector after this year’s rally.
Safran and Rheinmetall each added close to 2%.
In the meantime, key Italian stocks closed firmly lower amid their dividend detachment, while French luxury giants dropped sharply following the release of softening retail sales in major consumer China.