Published by Global Banking & Finance Review®
Posted on January 5, 2026
2 min readLast updated: January 20, 2026
Add as preferred source on GoogleEuropean defence stocks rose sharply after US military action in Venezuela, with the sector seeing a 3.2% increase. Analysts suggest potential shifts in US foreign policy focus.
Jan 5 (Reuters) - Shares in defence stocks were leading gains in Europe on Monday, following U.S. military action in Venezuela at the weekend that supported the sentiment for the sector.
An index of aerospace and defence companies was up around 3.2% at 0902 GMT, to its highest since late October, compared to a 0.4% rise on the pan-European STOXX 600 index.
Germany's Hensoldt, Rheinmetall, Renk all rose between around 6% and 7% and were among the top gainers on the STOXX.
Italy's Leonardo was also up some 6% and Sweden's SAAB moved 6.7% higher, while BAE Systems, Thales, Dassault Aviation each rose around 4%.
Spain's Indra also rose some 6%.
Jefferies analysts said in a note the U.S. strike on Venezuela removes one of the key items of Washington's foreign policy focus, which might now turn to Greenland, and reaching a ceasefire in Ukraine, which has been a major overhang on the sector.
The deployment of European troops to Greenland may be once again on the agenda, the analysts noted.
"These developments would support European defence names today, in our view, further reinforcing the need to raise defence budgets quickly," they said.
France reiterated on Monday its support of the sovereignty and territorial integrity of Denmark and Greenland following renewed threats by U.S. President Donald Trump to take over Greenland.
(Reporting by Maria Rugamer, Anna Pruchnicka; Editing by Amanda Cooper)
An index in finance is a statistical measure that represents the performance of a group of assets, such as stocks or bonds. It helps investors track market trends and compare the performance of individual investments.
The STOXX 600 index is a stock market index that represents 600 of the largest companies across 17 European countries. It serves as a benchmark for the overall performance of European equities.
Military action refers to the use of armed forces to achieve specific objectives, such as enforcing policies or responding to conflicts. It can include operations like airstrikes or troop deployments.
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