European Backing for Ukraine 'Turbocharges' Arms Shares
Investors piled into European arms manufacturer shares and punished long-dated government bonds on Monday, following the clearest sign yet the region's leaders were racing to increase defence spending and help to secure peace in Ukraine. A flurry of European diplomacy, including an agreement to spend more on defence, followed an acrimonious meeting between President Volodymyr Zelenskiy and U.S. President Donald Trump on Friday. The euro rose by as much as 0.7% to $1.045, as investors flocked to the European equity market, where an index of aerospace and defence companies hit record highs.
- This surge in investor appetite for arms manufacturers highlights the growing acceptance that military spending is necessary to counter global security threats, particularly from Russia's actions in Ukraine.
- Will this renewed focus on European defence spending also lead to a broader reevaluation of NATO's role and purpose in the face of emerging threats?