Shares of European defense companies are falling amid growing hopes for a settlement of the Russia-Ukraine conflict after the meeting between Trump and Zelensky.
European shares broadly rose modestly on Tuesday as global markets reacted positively to the outcome of talks between US President Donald Trump, Ukrainian President Volodymyr Zelensky and European leaders at the White House on Monday.
The pan-European STOXX 600 index was up 0.1% by 8:11 a.m. London time (3:11 a.m. ET), with most sectors in the green.
Defense stocks were among the index's early losers as investors digested the news from Washington. The Stoxx Europe Aerospace and Defense Index fell 1.4%.
Shares in German tank parts maker RENK fell 6.5%, Italian defense giant Leonardo fell 4.6%, and Swedish Saab fell 4.2%.
Trump said Monday that peace talks could proceed alongside ongoing fighting, backtracking on earlier calls for a ceasefire. He also said security guarantees for Ukraine would be “provided” by European countries “in coordination with the United States.”
Zelensky said a package of long-awaited security guarantees for Ukraine - which is expected to include major purchases of American weapons - would be "put on paper within the next week to ten days."
The US President also announced that a meeting between Putin and Zelensky is planned, followed by a trilateral meeting with the participation of Trump.
Asia-Pacific markets were mixed after a decline on Wall Street, and U.S. stock futures were slightly lower on Tuesday morning ahead of key Federal Reserve speeches this week.