19.08.2025, 15:27
Shares of European military factories fell amid negotiations on a peace deal
Source: OREANDA-NEWS
OREANDA-NEWS On Tuesday, August 19, the stock market value of leading European military and defense enterprises dropped significantly amid the desire of US President Donald Trump to conclude a peace deal between Russia and Ukraine. This is reported by Bloomberg.
Thus, the share price of the German concern Rheinmetall, after the completion of negotiations in Alaska and Washington, was currently falling by 4.9 percent compared to the closing level of the previous trading session. Quotes from another German industry company, the Renk Group (which produces special gearboxes for tanks and frigates), have dropped to a minimum since May 2025. The basket of shares of European military enterprises of the American investment bank Goldman Sachs, in turn, fell in price by 5.7 percent.
Analysts attribute this dynamic primarily to the progress in Washington's negotiations with Moscow and Kiev on the settlement of the conflict in Ukraine. Against this background, the concerns of the EU defense market participants about the likelihood of an early ceasefire and the risks of reducing demand for their products are increasing. However, this effect is likely to have a short-term impact on the quotes of leading European defense companies, says Patrick Armstrong, director of investment at Plurimi Wealth. The EU authorities' focus on a protracted confrontation with Russia is unlikely to worsen the financial situation of regional arms suppliers. "The structural factors are much deeper," the expert concluded.
In early March 2025, the EU authorities urgently approved the Rearm Europe strategy, aimed at strengthening the defense capabilities of European countries totaling 800 billion euros. It is planned to allocate funds from the budget over the next few years. The main financial burden (650 billion) in this scenario is expected to be borne by the participants of the block. The remaining 150 billion will be allocated through additional credit facilities. The rearmament plan, according to Ursula von der Leyen, head of the European Commission (EC), will help the region strengthen its capabilities to repel potential external attacks and provide additional support to Ukraine's defense industry.
Thus, the share price of the German concern Rheinmetall, after the completion of negotiations in Alaska and Washington, was currently falling by 4.9 percent compared to the closing level of the previous trading session. Quotes from another German industry company, the Renk Group (which produces special gearboxes for tanks and frigates), have dropped to a minimum since May 2025. The basket of shares of European military enterprises of the American investment bank Goldman Sachs, in turn, fell in price by 5.7 percent.
Analysts attribute this dynamic primarily to the progress in Washington's negotiations with Moscow and Kiev on the settlement of the conflict in Ukraine. Against this background, the concerns of the EU defense market participants about the likelihood of an early ceasefire and the risks of reducing demand for their products are increasing. However, this effect is likely to have a short-term impact on the quotes of leading European defense companies, says Patrick Armstrong, director of investment at Plurimi Wealth. The EU authorities' focus on a protracted confrontation with Russia is unlikely to worsen the financial situation of regional arms suppliers. "The structural factors are much deeper," the expert concluded.
In early March 2025, the EU authorities urgently approved the Rearm Europe strategy, aimed at strengthening the defense capabilities of European countries totaling 800 billion euros. It is planned to allocate funds from the budget over the next few years. The main financial burden (650 billion) in this scenario is expected to be borne by the participants of the block. The remaining 150 billion will be allocated through additional credit facilities. The rearmament plan, according to Ursula von der Leyen, head of the European Commission (EC), will help the region strengthen its capabilities to repel potential external attacks and provide additional support to Ukraine's defense industry.
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