EU defence stocks under pressure with Ukraine peace talks, Leonardo down

(Il Sole 24 Ore Radiocor) - Under pressure is the European defence industry, with the US administration's renewed commitment to end the Russian-Ukrainian conflict. The focus is on Friday's scheduled meeting in Alaska between US President Donald Trump and his Russian counterpart Vladimir Putin, during which they will discuss apossible peace settlement for Russia's war of aggression against Ukraine, which has now lasted almost three and a half years. Thus, investors are betting on realisation, in light of the brilliant performance over the past year, as they await future geopolitical developments.

At Piazza Affari, sales hit Leonardo - Finmeccanica, which slipped to the bottom of the FTSE MIB, despite having risen more than 71% since the start of the year. In the rest of Europe, Thales (-1.31%) in Paris, after losing more than 4% at the start of the year, and Bae System (-2.04%) in London, fell. Rheinmetall (-5.29%) in Frankfurt took another profit after last week's slide following the release of second quarter financial data. The results showed lower-than-expected sales and operating profit, as well as a slowdown in order intake, amid a boom in the defence sector, which many analysts point out could be exacerbated by the impact of a possible truce in Ukraine.

However, the volatility of stocks in the sector remains high, with investors continuing to be very sensitive to the international scenario. While the prospect of a détente in Ukraine is gaining momentum, tensions in the Middle East continue to rise. After the Israeli Security Council approved the plan for the land occupation of Gaza, the German federal government, in the voice of Chancellor Friedrich Merz, announced that, until further notice, no arms exports that could be used in the Strip would be authorised.