The rally in shares of European defense companies has begun to slow amid investor doubts about the durability of future funding, the Financial Times writes.
Another factor has been a shift in market interest toward drone makers and companies more closely tied to modern, high-tech forms of warfare.
The Stoxx Europe Targeted Defence index, which had risen by more than 40% annually since 2022, has fallen by more than 15% since reaching a peak in January. Most of the decline came after the start of the U.S.-Israeli war against Iran.
The rally in European defense companies has stalled
Against this backdrop, major defense groups including BAE Systems, Rolls-Royce, Thales, Leonardo and Rheinmetall have lost billions of euros in market value.