European defense companies fell sharply on Monday as talks over a potential peace agreement to end the war in Ukraine took a new turn.
President Volodymyr Zelenskyy said over the weekend that Ukraine was prepared to abandon the country’s longstanding aim of joining the NATO military alliance in exchange for alternative security guarantees to protect it from Russia. Joining NATO is unlikely given some members’ opposition, but the announcement marks a major policy shift by Ukraine.
Rheinmetall
, Germany’s largest arms manufacturer, had fallen more than 2.5% by 11:30 a.m. in London (6:30 a.m. ET).
The company, which also makes air defense systems, anti-tank weapons, armored vehicles, and ammunition, led the sector’s losses, as German counterparts Hensoldt and Renk also slipped into negative territory.
