Defense Stocks Surge 6% Amid Ukraine Tensions
European defence equities rallied on Friday as leaders gathered in Brussels to reaffirm support for Ukraine. Rheinmetall AG rose 4.4% in European trading by 08:52 GMT, while Leonardo SpA gained 3.9%, Thales Group added 2.6%, Saab AB climbed 3.5%, BAE Systems plc advanced 1.8%, and Germany’s Hendsoldt GmbH rallied about 6%. The broader sector saw gains ranging from 1.8% to 6.5%.
The market move coincided with heightened political tension. U.S. President Donald Trump, facing a November mid‑term election, blamed Ukraine’s strikes on Russian refineries for higher oil prices, stating in a Newsmax interview that the attacks were “a disgrace” for raising world oil prices. Earlier, Trump announced that Ukraine and Russia had agreed to stop targeting each other’s energy facilities, a pact Kyiv subsequently abandoned by striking a refinery southeast of Moscow. A U.S. official later indicated Washington was considering easing sanctions on shadow‑fleet vessels that transport Russian oil.
Ukraine’s allies expressed concern that the United States might scale back intelligence sharing and weapons support. President Volodymyr Zelenskiy told the Brussels summit that Kyiv needs more than energy assistance for the winter, emphasizing the need for air‑defence systems and additional funding. Finance Minister Sergii Marchenko warned that Ukraine faces an unfunded budget gap of $32.6 billion for the next fiscal year, not including an estimated $40 billion in direct military supplies pledged by allies. Dutch Prime Minister Rob Jetten said he was dissatisfied with the limited number of countries that have pledged new financial support, but expects further military aid announcements soon.
On the ground, Russian drone strikes killed three people in Kharkiv and left 370,000 residents of the Volyn region, which borders Poland, without power, prompting emergency power cuts in Kyiv. In retaliation for EU backing of Ukraine, Russia moved to place the local assets of French, German, Swedish and Dutch companies under temporary management. President Vladimir Putin downplayed the impact of Ukrainian attacks on Russian refineries, describing the damage as “nothing particularly significant.”