European defense companies fell on Monday amid new developments in negotiations over a possible peace deal to end the war in Ukraine.
President Volodymyr Zelenskiy said over the weekend that Ukraine is willing to abandon its long-held goal of joining the NATO military alliance in exchange for alternative security to protect itself from Russia. Although NATO membership is unlikely given opposition from some member states, the announcement marks a major policy shift for Ukraine.
line metalGermany’s largest weapons manufacturer was trading 1.9% lower as of 2:48 p.m. (9:48 a.m. ET) in London, roughly paring its earlier decline.
The company, which also makes air defense systems, anti-tank weapons, armored vehicles and ammunition, led the sector’s losses while German peers Hensoldt and Lenk fell into negative territory.
line metal.
Military technology and surveillance specialist Hensoldt was down 1% in afternoon trading, while tank maker Lenk was trading 1.1% lower. Swedish fighter jet maker Saab traded slightly lower.
President Zelensky’s proposal to abandon Ukraine’s long-term NATO ambitions came during ongoing talks this week with US officials Steve Witkoff and Jared Kushner. Kiev is now seeking separate security from the West, believing it is essential for a lasting ceasefire.
Hensoldt.
Speaking to reporters on WhatsApp on Sunday, President Zelensky said such security “provides an opportunity to prevent a new outbreak of Russian aggression.”
Russia remains firmly opposed to any NATO membership of Ukraine.
The long-running debate over how to end the nearly four-year conflict – which entered its second day in Berlin on Monday – has once again focused attention on the continent’s defense industry.
The Stoxx European Aerospace and Defense index rose 0.3% on Monday, erasing earlier losses. The benchmark has soared more than 50% since the beginning of the year.
