BERLIN / LONDON (IT BOLTWISE) – Donald Trump’s recent peace efforts in the Ukraine conflict have put pressure on defense stock prices. Despite impressive annual profits, investors are withdrawing, which has led to a significant decline in share prices. Experts see the profit-taking as an understandable reaction to the nervous market situation.
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US President Donald Trump’s recent peace initiatives in the Ukraine conflict have had a significant impact on the defense stocks market. Despite the impressive gains many of these companies posted in 2023, the announcements resulted in a noticeable decline in stock prices. Investors use the opportunity to take profits, which further weighs on prices.
Last Friday, defense stocks worldwide recorded a significant price decline. This came after Trump intensified his efforts to find a peaceful solution to the Ukraine conflict. Despite a €1.5 billion financial aid pledge from the EU to strengthen defense capabilities by 2027, investors remained cautious. The strong performance of defense stocks in recent months has led to increased profit-taking.
Among the companies affected was Rheinmetall, which suffered a decline of 5.8 percent in the DAX, although it had recorded an increase of 172 percent over the course of the year. Armaments companies such as Hensoldt and Renk also suffered in the MDax, with share prices falling by 6.8 percent and 5.8 percent respectively. Despite these declines, they remain the leaders with annual gains of 166 and 240 percent. Airbus, which, in addition to armaments, also relies heavily on civil aircraft construction, also lost 2.3 percent, bringing the annual increase down to 30 percent.
International arms giants were also affected. In France, Safran lost 2.3 percent, while in Italy Leonardo fell 5.0 percent. British companies such as BAE Systems and Rolls-Royce saw declines of 3.3 percent each. Stock expert Frederik Altmann from Alpha Research emphasizes that Trump’s announcement of a ‘peace summit’ with Putin is putting pressure on the markets. Investors are reacting to possible progress in the Ukraine conflict with further sales.
Although Trump continues to push for a solution to the conflict, it remains questionable whether his efforts in a meeting with Putin will bear fruit. Past meetings, such as the one in August in Alaska, sometimes showed clear advantages for Putin, while the Russian president made no visible concessions. Andreas Lipkow, another stock expert, sees the profit-taking as understandable given the nervous market situation and the arms industry’s impressive annual performance.
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