European shares marked a record closing high on Monday, boosted by defence stocks as investors priced in the likelihood of increased military spending in the region, following growing U.S. pressure.

Investors expect European countries to ramp up spending on fighter jets, tanks, and other equipment, bolstering the shares of the companies that can build it.

European bonds slipped and shares in defense companies rallied on the likelihood of greater military spending, which could force governments to step up borrowing in the coming years.Most Read from Blo