European stocks of the top defense companies have surged after US President Donald Trump’s remarks on Ukraine’s territorial recovery. For instance, Sweden’s Saab, known for its JAS 39 Gripen fighter jet, has seen growth of +5%, Reuters reports.
On 23 September, Trump emphasized that Ukraine has every chance to regain all of its territory within its original borders. However, he did not mention any aid packages that would help Kyiv on this path, and has not introduced sanctions. According to him, Russian President Vladimir Putin is facing enormous economic difficulties, making now the right time for Kyiv to act.
The market responds with a defense stock rally
After Trump’s statements, the European aerospace and defense index rose 1.1%, approaching record highs.
The biggest gains were seen in Sweden’s Saab (+5%), Hensoldt (+4.6%), Spain’s Indra (+3%), and Italy’s Leonardo (+3%). Shares of BAE Systems increased by 1.4%, Rheinmetall by 2%, and French companies Thales and Dassault Aviation rose 1.6–1.9%.
Analysts explain the surge in demand
Neil Wilson, UK investor strategist at Saxo Markets, said Ukraine’s winning back its territory seems a notable shift from only a few weeks ago, when Trump was set on doing a land deal with Putin without Ukraine.
“This alone is a significant shift in the optics and could indicate war goes on longer (and) US support for NATO is solid,” he explained.
Jochen Stanzl, analyst at CMC Markets, added, “US President Trump’s about-face on Ukraine policy is bringing defence stocks into play today.”