Euro defence shares rocket after UK Summit
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The news: Shares in European defence companies neared record highs on Monday, on growing expectations that EU governments will boost military spending.
The numbers: The pan-European STOXX 600 index was up 0.4% in early trading, building on a 10-week-run of gains. Rheinmetall surged 17.4%, BAE Systems jumped 11.6% and Leonardo advanced 15.1%.
The European aerospace and defence index surged more than 6% to a record high, on track for its biggest one-day gain since November 2020.
The context: Shares in the defence stocks continued their 2025 rally on the back of weekend talks between European leaders, who have pledged to support Ukraine by boosting defence spending and construct a peace plan to present to the US.
UK Prime Minister Keir Starmer hosted the London Summit on Sunday, where he urged European leaders to step up their defence efforts. The talks followed a dramatic Oval Office clash between Ukrainian President Volodymyr Zelensky and US President Donald Trump on Friday (Saturday AEDT), where Trump berated Zelensky over Ukraine’s reliance on US aid and Vice President JD Vance accused him of ingratitude for US support.
Starmer said urgent talks with Trump, Zelensky and French President Emmanuel Macron had cemented the idea that a "coalition of the willing" in Europe would need to work on a peace plan that can be backed by the United States, Bloomberg reported.
The UK pledged £1.6 billion ($3.2 billion) in export finance for 5,000 air-defence missiles.
On Monday morning, the UK distanced itself from French President Emmanuel Macron’s proposal for an initial one-month truce between Russia and Ukraine. Macron proposed the ceasefire following the London Summit, with a UK official responding that “There are various options on the table, subject to further discussions with the US and European partners, but a one-month truce has not been agreed.”
The sources: Capital Brief, Financial Times, Reuters
