Defence stocks surge as Europe ramps up military spending amid Ukraine war
Defence stocks saw a significant rise in early trading as Europe prepares to boost its military spending to ensure peace in Ukraine.
BAE Systems on the FTSE 100 surged by as much as 18.5pc and Dassault Aviation on the Euronext in Paris jumped by as much as 19pc after Sir Keir Starmer chaired a European summit in London over the weekend, News.Az reports, citing The Telegraph.
The FTSE 100 hit a new record high after Emmanuel Macron said France and Britain are to propose a one-month truce in Ukraine “in the air, at sea”.
The French president told Le Figaro that European soldiers would only be deployed on the ground in the second phase of a potential peace deal.
Meanwhile, government borrowing costs also edged higher as the European peace talks raised the prospect of higher defence spending.
On the bond markets, Germany’s 10-year bund yield, the eurozone benchmark, rose four basis points in early trading to 2.43pc.
The move higher in bond yields was partly a rebound from Friday’s more than two-week low of 2.37pc, but also came after European leaders agreed at a Sunday summit in London that they must spend more on defence.
The European Commission chief Ursula von der Leyen suggested the bloc could ease rules that limit debt levels in a move which would likely make bond investors uneasy.
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