Ukraine peace talks drive down European defense stocks
Industrial giants Saab, Rheinmetall and Renk were among the leaders of the decline
Shares of European defense companies fell sharply in trading on Tuesday, December 16, amid news of ongoing negotiations on a peace agreement between Russia and Ukraine. Saab, Rheinmetall and Renk were among the leaders of the fall, as investors began to put the scenario of de-escalation of the conflict into prices, CNBC wrote.
Details
Among the leaders of the decline in trading in Europe on Tuesday, December 16, were shares of the European aerospace and defense sector. Securities of the Swedish industrial and defense company Saab fell in price by almost 6%, German Rheinmetall, a key supplier of weapons in Germany, and Renk, a manufacturer of products for military equipment - by almost 5% and 2%, respectively, writes CNBC. The decline in shares in the defense sector in Europe is observed for the second day in a row.
In addition, oil prices on December 16 fell to their lowest levels since Ma. The reason for such movements in the market, among other things, were statements by Ukrainian President Vladimir Zelenskyy, who over the weekend admitted the country's readiness to give up aspirations to become part of NATO for the sake of reaching an agreement on ending the military conflict. US President Donald Trump, in turn, said on Monday, December 15, that after "long and very good negotiations" with US representatives and European leaders, Russia and Ukraine are, in his opinion, "closer than ever" to ending the conflict.
What the market is saying
The conflict in Ukraine has been the catalyst for a sharp revaluation of defense stocks in Europe, MarketWatch notes. JPMorgan analyst David Perry said in November that military action between Russia and Ukraine, based on his discussions with defense experts and sources familiar with the situation, would last until at least 2026.
In this regard, Perry believed that the situation creates "an attractive entry point into the defense sector." He also urged Europe to urgently build up its own military capabilities so that the region's security would no longer depend on U.S. support.
This article was AI-translated and verified by a human editor
