FRANKFURT (dpa-AFX) – Defense stocks accelerated their latest price correction on Friday in view of US President Trump’s further peace efforts in Russia’s war of aggression against Ukraine. Meanwhile, the fact that the EU has now agreed to provide financial aid worth 1.5 billion euros to strengthen defense by the end of 2027 received little attention. There was a lot of talk on the market about profit-taking after the shares had risen extremely sharply over the course of the year so far.
In this country, Rheinmetall, one of the bottom performers in the DAX, lost 5.8 percent to 1,671.50 euros, which means the year-to-date increase is still 172 percent. HENSOLDT with minus 6.8 percent and RENK with minus 5.8 percent were the biggest losers in the MDAX. So far this year they remain the biggest winners with an increase of 166 and 240 percent respectively.
Alzchem held the red lantern in the SDAX small cap index with a loss of 5.6 percent to 149.80 euros (annual increase: 163 percent). Airbus (Airbus SE), which is more focused on civil aircraft construction and armaments, lost 2.3 percent in the Dax to 200.45 euros, which caused the annual increase to shrink to at least 30 percent.
In Paris, SAFRAN lost 2.3 percent on Friday, which is still an increase of around 40 percent in the year to date. In Italy, Leonardo fell by 5.0 percent, which reduced the annual profit, but it is still 86 percent. BAE Systems and Rolls-Royce each lost 3.3 percent in Britain on Friday.
“Arms stocks like Rheinmetall have been under pressure since the beginning of October,” said stock expert Frederik Altmann from Alpha Research. The announcement of a new “peace summit” with Putin is seen as a further attempt to end the war in Ukraine and has thus caused another stone to fall.
After sealing a ceasefire in the Middle East, US President Donald Trump is now turning his attention to the Ukraine conflict. He spoke of a “very productive” telephone conversation with Russian President Vladimir Putin and announced a joint meeting in Budapest. Ukrainian President Volodymyr Zelenskyj is currently visiting the USA, as a meeting between these two presidents is planned for this Friday.
According to Altmann, the peace work in Gaza, which at least appears to be successful for the time being, together with Trump’s current enthusiasm for Ukraine, is causing a number of investors to “continue to sell, also in the sense of taking profits.” After all, after the impressive performance so far this year, many are afraid of missing the right time to sell.
Stock expert Andreas Lipkow made a similar statement: “It is understandable that profits are being taken in the current situation and the associated nervousness.” On the one hand, Trump “remains on the ball to initiate a possible peace process in the Ukraine war.” On the other hand, the defense industry is one of those that has developed best so far in 2025.
Nevertheless, it remains to be seen whether Putin will end up showing off Trump again, as he did at a first meeting in August. The summit in Alaska at the time could hardly have gone better for Putin: a reception on the red carpet, discussions on equal terms and then the withdrawal of the demand for a ceasefire as a condition for peace talks. And all of this without the Russian President making any visible concessions./ck/mis/stk
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