Europe midday: Defence stocks slide on optimism around Ukraine peace talks
By Frank Prenesti
Date: Tuesday 19 Aug 2025
(Sharecast News) - European shares extended gains on Tuesday as traders reacted positively to hopes of a Russia-Ukraine peace deal after talks in Washington between US President Donald Trump and Ukraine leader Volodymyr Zelenskyy, although the news sent shares in arms makers plunging amid fears their wares may not be in as much demand as first thought.
The pan-regional Stoxx 600 rose 0.39% to 556 at 1153 BST with all major bourses following suit.
Trump and European leaders also present in Washington claimed Russia leader Vladimir Putin had agreed to meet face-to-face with Zelenskyy to thrash out a peace deal, although there was no confirmation from Moscow.
A day of talks saw Trump rule out a ceasefire and repeat his false claim he had stopped six wars this year alone, while Zelenskyy and the leaders of France, Germany and UK pressed for US-backed security guarantees as part of any long-term agreement.
"The next step is to bring Putin to the negotiating table and find a durable solution. Peace has rarely felt so close," said Swissquote Bank analyst Ipek Ozkardeskaya.
"Crude oil opened lower this week after the first Trump-Putin meeting went smoothly, then rebounded ahead of the Trump-Zelensky summit on news of fresh Russian and Ukrainian attacks - including a strike on a Russian oil pipeline system. This morning, oil is back under pressure, trading below $63bp, as optimism for a lasting truce builds."
The talk of peace hit defence stocks, with shares in Renk Group, Leonardo, Dassault, Thales, Qinetiq, Rheinmetall and Hensoldt all lower.
Reporting by Frank Prenesti for Sharecast.com
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