The Strategist

Defense stocks in Europe and the U.S. jump up amid Israel-Gaza conflict

10/10/2023 - 06:34

According to the Financial Times, the conflict between Israel and Hamas, which could spark a new round of hostilities in the Middle East, prompted a strong increase in shares of defense industry businesses in Europe and the United States.

Securities of the Swedish aircraft company Saab, which increased by 8.6%, were the leaders in growth in Europe. Papers of German Rheinmetall, which makes tanks, increased by 4.75% on the Frankfurt Stock Exchange, and Italian Leonardo, which manufactures helicopters, saw a 4.6% increase in Milan. Papers of BAE Systems, the largest British defense corporation, increased by 3.14% on the London Stock Exchange.

Shares of the top five American defense companies added in value in pre-market trading.

Shares of RTX Corp (formerly known as Raytheon Technologies) rose 3.68% on Nasdaq, while those of Lockheed Martin rose 4.83%. Northrop Grumman and General Dynamics added 3.26% and 3.19%, respectively.

The papers of American and European arms producers are growing as the Middle East situation continues to deteriorate rapidly. On October 7, morning, Hamas started firing rockets against Israel. In response, Israel's government proclaimed that the nation was at war. A total blockade of the Gaza Strip was enacted, and 300,000 reserve soldiers were called up. The most recent statistics show that attacks affected more than 700 persons in Israel. More than 400 deaths were reported in the Gaza Strip.