Leonardo halts the fall after eve's thud, but the defence is still under pressure

(Il Sole 24 Ore Radiocor) - Leonardo rebounded in Piazza Affari and regained a few points (+1.26% to 44.86 euro) after the eve's slide (-10.16%), triggered by the possible de-escalation of the war in Ukraine. The share price had started out still declining, only to turn positive in a weak session for the Ftse Mib (-0.36%).

Generally speaking, the eve of the summit saw gains in the entire defence sector, helped by theprogress towards a peace agreement between Moscow and Kiev that emerged from the Monday 18 August summit between US President Donald Trump, Ukrainian President Volodymyr Zelensky, and some of Europe's top leaders. Although the most controversial issues, such as the cession of territories, were not discussed, there was much talk about the security guarantees that the EU and the US could offer Ukraine in the future. Moreover, the head of the White House announced that he was working on organising a summit between Zelensky himself and Russian leader Vladimir Putin, which should be followed by a trilateral with Putin himself in attendance. Kiev has also reportedly offered to buy$100 billion worth of American weapons as part of a deal to ensure its security.

 These developments, noted yesterday from the operations room, potentially reduce future demand for European armaments, taking the momentum away from the long-standing rally of continental manufacturers. Leonardo itself, for example, despite the debacle of the eve, remains up around 70% since the beginning of 2025 (the year in which it also touched all-time highs) and over 600% since the Russian invasion of Ukraine in February 2022. In the same period Fincantieri rose by more than 130%. Similar situation for the other stocks in the Old Continent sector, still under pressure in today's session: Rheinmetall since the start of the year has plundered more than 150% in Frankfurt, Thales 63% in Paris and Bae Systems 50% in London.