Shares of European defense and industrial concerns rose after the victory of the opposition CDU/CSU bloc in the parliamentary elections.
Shares of German companies rose especially strongly: Volkswagen Group by 2.4%, metallurgical and defense concern Rheinmetall by 4.4%, ThyssenKrupp by 4.4%. Shares of defense corporations from other European countries also increased: British BAE Systems by 3.6%, French Thales by 2.2%, Italian Leonardo by 1.8%. The growth was facilitated, in particular, by statements by future German Chancellor Friedrich Merz that “the absolute priority will be to strengthen Europe as quickly as possible, so that step by step we can truly achieve independence from the United States.” The leading stock indices of Germany as a whole also rose. The GDAX index of large companies rose 0.8%, the MDAX index of mid-cap companies added 2.3%, and the SDAX index of small-cap companies jumped 11%. Experts polled by Bloomberg attributed the rise in quotes across all segments to investors’ hopes for fiscal liberalization, as well as for the easing of regulations that had previously been strengthened by the Social Democrats, who had lost their majority in the Bundestag.
A week ago, shares of European defense companies also rose strongly after the Munich Security Conference, which made it clear that European countries would most likely invest more actively in their security.
