The shares of the Italian Leonardo companies, the Swedish SABB and the German Rheinmetall topped the stock losses in the European markets
Milan – Reuters
Posted on: June 26, 2023: 07:35 PM GST Last updated: June 26, 2023: 08:07 PM GST
Shares of European and US defense producers fell on Monday after an unfinished insurgency in Russia raised doubts about President Vladimir Putin’s grip on power, prompting a wave of profit-taking in a sector that has already benefited greatly from increased military spending.
The shares of the Italian “Leonardo”, the Swedish SABB and the German Rheinmetall fell by more than 6% at one point, topping the stock losses in the European markets. Shares of Dassault Aviation France also fell about 5%.
Shares of major US defense companies, such as Lockheed Martin, Northrop Grumman and RTX, fell about 2% each. Shares of General Dynamics also fell 1.2% in morning trading in New York.
“If Russia backs off its aggression in Ukraine, that could mean less military assistance to the country, which of course could mean less sales of military hardware,” said Randy Frederick, a director at Charles Schwab Financial Services.
But he added, “If there is a decline in defense stocks, I think it will be relatively short-term.”
On Monday, Russia’s defense minister appeared discussing the war in Ukraine with troops, conveying a message that it was business as usual after Russia’s private military group, Wagner, briefly tried to overthrow the minister, occupied a strategic command post for the invasion of Ukraine and marched on Moscow.
The European Aerospace and Defense shares index fell about 2.2%, before paring losses to 0.6%. Over the past 12 months, the index has risen more than 30%.
2023-06-26 15:35:00
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