Arms companies’ shares are soaring following Donald Trump’s latest statements about Russia and NATO.
The president urged NATO countries to shoot down Russian aircraft that violate their airspace, while promising to continue delivering weapons to NATO and claiming that Ukraine can defeat Russia and reclaim its entire territory.
I think Ukraine, with the support of the European Union, is in a position to fight and WIN all of Ukraine back in its original form”, wrote Trump.
He also emphasized that Ukraine “might even be able to go further than that” and conquer Russian territory, promising to continue delivering weapons to NATO member countries.
“We will continue to supply weapons to NATO for NATO to do what they want with them. Good luck to all!”
Saab and European defense companies lead gains
Trump’s statements had an immediate effect on the stock market.
A basket of European arms and military companies rose by a full 2.8 percent following the president’s comments. German Rheinmetall increased 1.4 percent, British BAE Systems 1.6 percent – and Swedish aerospace and defense company Saab AB jumped nearly five percent to a new record level.
In Asia, the gains were even more pronounced. South Korean Hanwha Aerospace, the country’s largest weapons producer, rose 5.9 percent. The company has recently held talks with several Western European countries about contributing to expanded weapons production. Korea Aerospace Industries and Hyundai Rotem increased over four percent each, while Japanese IHI surged nearly ten percent.
The defense industry has already enjoyed strong momentum on stock exchanges for some time, where continued geopolitical tensions and conflicts, Trump’s war rhetoric and expectations of growing military budgets are driving up interest further and providing new price rallies worldwide.