Europe stocks mixed, defence sector drops
European defence stocks declined as investors reacted to signs of progress in peace negotiations between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy
European markets traded in a mixed fashion on Monday as trading resumed after Christmas week, with defence stocks sliding following talks between Trump and Zelenskiy.
The FTSE 100 in the U.K. dropped 0.05% while the CAC 40 in France and the DAX index in Germany both advanced 0.1%.
European defence stocks declined as investors reacted to signs of progress in peace negotiations between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy.
Trump stated that the two leaders were “getting a lot closer” to reaching a deal, though territorial issues remain unresolved following their meeting.
Italian defence contractor Leonardo SpA was among the hardest hit. German defence firms also saw significant declines, with Rheinmetall AG and Hensoldt down.
British defence giant BAE Systems PLC also declined during morning trading.
The sector-wide decline comes as markets assess the potential implications of a possible peace agreement between Ukraine and Russia, which could potentially reduce defence spending and military equipment orders in Europe.
Asset management firm GAM Holding has voiced opposition to a proposed takeover of Honda unit Yutaka Giken by Indian auto parts maker Samvardhana Motherson International Ltd, claiming the offer undervalues the Japanese company.
GAM chief executive Albert Saporta confirmed the firm has sent a letter to Yutaka Giken’s president, urging the company to either abandon the transaction or negotiate a significantly higher price. Yutaka Giken manufactures components for exhaust, drivetrain, braking, and thermal management systems and is described as a profitable operation.
In separate news, BasePoint Capital has reached an agreement to purchase International Personal Finance PLC for 235 pence per share in cash. The transaction values the company at nearly £543 million.
The offer represents a 31.1% premium to IPF’s closing price on July 29, 2025, which was the last business day before the offer period commenced. The deal also reflects a 45.3% premium to the company’s three-month volume-weighted average price.