Defense stocks rally as Trump, in a major shift, says Ukraine can win back territory from Russia

Global defence stocks moved higher connected Wednesday aft U.S. President Donald Trump, in a large rhetorical shift, said Ukraine could retake territory presently occupied by Russia.

In a post published overnight connected his Truth Social platform, Trump said that Kyiv, with the enactment of the European Union and the NATO subject coalition, "is successful a presumption to combat and WIN each of Ukraine backmost successful its archetypal form."

The EU and NATO person offered subject and humanitarian enactment to Ukraine — which is not presently a subordinate of either enactment — since the commencement of Russia's penetration successful 2022.

Trump said his presumption came aft "getting to cognize and afloat understand" Russia and Ukraine's subject and economical situation, noting what helium described arsenic the "economic trouble" that the struggle is causing successful Moscow. The White House person besides likened Russia to a "paper tiger" — a word that typically refers to a unit that appears powerful, but is successful information ineffective.

The U.S. president has antecedently suggested Ukraine would request to beryllium unfastened to giving up immoderate of its territory successful bid talks, which Washington has taken steps to broker since the commencement of Trump's 2nd mandate.

In abstracted comments connected Tuesday, Trump said NATO members should sprout down Russian jets entering its airspace, pursuing a bid of reported incursions successful the Polish, Romanian and Estonian skies by Russian craft and drones successful caller weeks.

Defense stocks were among the apical performers connected the pan-European Stoxx 600 scale connected Wednesday morning.

Swedish defence elephantine Saab was past seen trading astir 4.4% higher, notching a caller 52-week high, portion Italian defence steadfast Leonardo and German vessel parts shaper Renk some roseate much than 3%.

German defence steadfast Hensoldt was different apical performer, up 3.7% astatine 11:00 a.m. London time.

Hensoldt Chief Financial Officer Christian Ladurner said Trump's comments don't needfully alteration the wide concern for Europe's defence industry, but that they alternatively reaffirm the sector's warnings that Russian President Vladmir Putin volition proceed to trial the bloc.

"I think, successful general, we person to accidental that the developments we person seen successful the past 2 days are precise encouraging for Europe," Ladurner told CNBC's "Squawk Box Europe" connected Wednesday.

"We spot that the U.S. is much and more, I would say, seeing the reality, what is truly happening and what has happened. So, this is encouraging for us," helium added.

In Asia, large South Korean defence stocks — including Hanwha Aerospace, Korea Aerospace and Hyundai Rotem — all posted gains of betwixt 2% and 5% connected Wednesday.

Ukrainian President Volodymyr Zelenskyy welcomed Trump's Truth Social post, saying connected societal media that helium was "grateful" for the U.S. president's "strong cooperation."

Trump "clearly understands the concern and is well-informed astir each aspects of this war. We highly worth his resoluteness to assistance extremity this war," Zelenskyy said connected societal media level X connected Tuesday evening.

Russia — which has improved rapprochement with Washington successful caller months — besides responded to Trump's tonal displacement connected the Ukraine war.

Kremlin spokesperson Dmitry Peskov connected Wednesday said Putin "highly values Trump's willingness to help" find solutions connected Ukraine. Peskov disputed Trump's labelling of Russia arsenic a alleged "paper tiger," however.