European defense shares declined in early Monday trading as investors assessed the prospects of a potential peace agreement between Ukraine, the U.S., and Russia ahead of the scheduled meeting between President Donald Trump and Russian President Vladimir Putin later this week.
Stocks of companies such as Renk (TG:R3NK) and Hensoldt (BIT:1HENS) each fell over 2%, alongside Germany’s Rheinmetall (BIT:1RHM) and Italy’s Leonardo (BIT:LDO).
With the summit set for Friday in Alaska, Trump hinted that a resolution to the ongoing conflict in Ukraine might involve territorial exchanges between the involved parties. He announced the upcoming talks last Friday, coinciding with a self-imposed deadline for Russia to agree to a ceasefire or face additional sanctions from Washington.
Concerns have emerged over the absence of Ukrainian President Volodymyr Zelenskiy from the talks, raising questions about whether Ukraine might be pressured into accepting terms dictated by the U.S. and Russia. Despite this, Zelenskiy continues to receive strong support from NATO and various European nations, who emphasize that Kyiv’s participation in negotiations is essential.
U.S. Vice President JD Vance has indicated that efforts are underway to organize a meeting involving Trump, Putin, and Zelenskiy.
Previous attempts at peace, including three rounds of talks between Ukraine and Russia over recent months, have yet to bring an end to the conflict.
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