Stoxx 600, FTSE, DAX, CAC

The pan-European Stoxx 600 was flat in mid-morning trading, having hit an intraday record high of 589.61 earlier in the session.

The U.K.’s FTSE index opened slightly higher, while France’s CAC 40, Germany’s DAX and Italy’s FTSE MIB were slightly lower.

European defense stocks were falling in morning trading following weekend peace talks between President Donald Trump and Ukrainian counterpart Volodymyr Zelensky.

Shares of Leonardo fell 4% and Renk dropped 3.1%, while Kongsberg, Hensoldt, Rheinmetall and Saab fell between 2% and 3%, respectively. The Stoxx Europe aerospace and defense index was 1.6% lower. Mining companies offset losses, with the sector rising 1.2% by 10:30 a.m London time (5:30 Eastern time).

While peace talks could lead to a setback for defense stocks, Sydbank analyst Jacob Pedersen said, “it will quickly be apparent that the investments needed in defense in Europe will continue and they will accelerate massively over the next years.”

“Definitely a positive potential for European equities if we get some kind of peace,” Pedersen told CNBC’s “Squawk Box Europe.”

French biotech Abivax was up 3.8% in morning trading, among the top performers in Europe’s blue-chip index. The clinical stage drugmaker has been the subject of takeover rumours and optimism about the prospects for its lead asset – a treatment for ulcerative colitis.

London-listed miner Fresnillo climbed 3.4%. Shares have rallied more than 400% this year, mirroring big gains in precious metals.

Silver climbed above $80 an ounce for the first time early Monday before pulling back. The precious metal was last seen trading at $75.34 an ounce. Meanwhile, gold dropped 1.3% to last trade at $4,495 an ounce, and copper fell 2.3% to $5.71 an ounce.

Trading volumes could be lighter this week, given the ongoing Christmas holidays, and with regional markets set to close Thursday for New Year’s Day.

The prospect of a peace deal for Ukraine before the year’s out is fading after Trump and Zelenskyy said on Sunday that progress had been made during talks to end the war but that “one or two very thorny issues” remained.

Oil prices rose as investors weighed the prospects of a deal to end the war in Ukraine.

U.S. crude oil rose 1% to $57.34 a barrel, while global benchmark Brent gained 1% to $61.27. Both benchmarks fell about 2% on Friday.

Trump had been targeting a peace deal before Christmas, but Ukraine and Russia remain far apart when it comes to territorial concessions demanded by Russia and security guarantees coveted by Ukraine.

Speaking to reporters following talks in Florida on Sunday, President Zelenskyy said they had come to an agreement on around “90%” of a 20-point peace plan and that the leaders had fully agreed on security guarantees for Ukraine. Trump was slightly less bullish on that front, saying an agreement was “close to 95%” done.

There are no major European earnings or data releases on Monday.

U.S. futures were modestly lower in premarket trading with the S&P 500 falling 0.2% and the Nasdaq 100 0.4% lower at 5:30 a.m Eastern time.