European defence stocks Saab, Hensoldt rally up to 5% after Trump’s Ukraine remarks

European shares slipped into the red on Wednesday morning, but defence stocks stood out as a rare bright spot after US President Donald Trump voiced support for Ukraine’s efforts to reclaim all of its lost territory.

The pan-European Stoxx 600 was down 0.5% at 8:27 a.m. in London, with most sectors under pressure. In contrast, the Stoxx Europe Aerospace and Defence Index gained 1.1%.

Sweden’s Saab surged 5%, German tank parts maker Hensoldt climbed 4.5%, and Swedish defence technology group MilDef advanced 3.4%.

Other defence majors also joined the rally, with Renk and Italy’s Leonardo rising around 2%, while France’s Thales and Dassault Aviation added between 1% and 1.6%.

The trigger was Trump’s striking change of tone on Ukraine. Speaking on the sidelines of the United Nations General Assembly in New York, where he met Ukrainian President Volodymyr Zelenskyy, Trump said Kyiv could recapture its original borders with backing from Europe and NATO.

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“Ukraine, with the support of the European Union, is in a position to fight and WIN all of Ukraine back in its original form,” he wrote on Truth Social, shortly after meeting Zelenskiy on the sidelines of the U.N. General Assembly in New York.

He added that NATO support, including shooting down Russian aircraft breaching allied airspace, would be key.

Elsewhere, sentiment across global markets was tempered by U.S. Federal Reserve Chair Jerome Powell, who cautioned that equities were trading at “fairly high” valuations. His remarks rattled investors, with Asian shares falling overnight and US stock futures trading flat in early Wednesday action.