Europe open: Geopolitical tensions boost weapons makers
By Frank Prenesti
Date: Monday 17 Feb 2025
(Sharecast News) - European shares were higher at the open on Monday with the rift between Europe and the US over the future of Ukraine boosting shares in weapons makers.
The pan-regional Stoxx 600 index was up 0.17% at 553 points in early deals, with major bourses mostly higher. Traders were expecting a light day of trading with US financial markets closed on Monday for the Presidents Day holiday.
French President Emmanuel Macron has convened an emergency meeting in Paris with fellow continental leaders to formulate a response to US President Donald Trump's attempt to sideline them and Ukraine from talks with Russia to end the war.
The US administration said it would hold direct talks with Russia leader Vladimir Putin to end the war, excluding Kyiv from any discussion and apparently allowing Russia, the aggressor state, to keep any Ukrainian land it had seized. Trump also wants 50% of Ukraine's rare earth minerals.
UK Prime Minister Keir Starmer said he would be prepared to send UK troops to Ukraine to help maintain peace once any deal with Russia was finally struck. Trump last week said US forces would not undertake any peacekeeping duties and many European leaders now fear an emboldened Russia would take the opportunity to attack neighbouring states.
"Investors are keeping a close eye on US-led peace talks for the Ukraine war, especially since EU and Ukrainian officials were excluded from the discussions. On top of that, President Trump's threat to impose tariffs on European car imports starting April 2 is adding to the uncertainty, leaving traders cautious about the broader market outlook," said Hargreaves Lansdown analyst Matt Britzman.
Shared in arms makers were sharply higher on the back of demands by Trump that NATO members ramp up military spending. Rheinmetall, Saab, BAE, Leonardo, Dassault, Qinetiq and Thales were all beneficiaries of geopolitical tensions.
Reporting by Frank Prenesti for Sharecast.com
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