European Defense Companies Soar on Middle East Conflict

By Cristina Gallardo

Investors flocked to European defense companies in early trade Monday, as the conflict in the Middle East widens and missile technology comes into focus.

On the third day of the conflict, the U.S. and Israeli militaries continued to strike Iran, while Israel also hit Hezbollah targets in Lebanon. Meanwhile, Iran resumed strikes on Israel and has been targeting airports and other sites in neighboring Gulf countries.

BAE Systems was the biggest riser, surging 7.9%, followed closely by Saab and Thales, both of which were up 6.1%.

Hensoldt, a German provider of sensors and radars, advanced 5.2%, while Norway's Kongsberg and Italy's Leonardo both rose 4.7%, and explosives manufacturer Chemring gained 4.5%.

Germany's defense giant Rheinmetall, France's Dassault Aviation and Spain's Indra Sistemas all increased 3.5%.

Companies and multinational projects making air-defense systems will likely attract interest from investors, Citi analyst Charles Armitage said.

This includes the European Sky Shield Initiative, a project involving 22 countries led by Germany, which includes European and U.S. defense contractors such as Diehl Defence, Rheinmetall, Hensoldt and RTX.

Other programs that could come into focus include SAMP/T, a missile-defense system run by the Eurosam joint venture between MBDA and Thales, and Leonardo's proposed Michelangelo Dome network system, Armitage said.

Write to Cristina Gallardo at cristina.gallardo@wsj.com

(END) Dow Jones Newswires

March 02, 2026 04:06 ET (09:06 GMT)