European defence stocks surge as region's leaders plan spending boost

Shares in European defence companies rallied on Monday as European leaders met to discuss Ukraine and regional security.

Italy's Leonardo showed gains of around 5.27% in daily trading as of around 11am CET, while shares in Germany's Rheinmetall were up 7.83%.

Germany's Hensoldt was up 9.81%, Sweden's Saab recorded a 10.34% gain, while France's Thales saw an increase of 4.72%.

Increased investor interest comes as European leaders are working on a new defence package to support Kyiv, although details have not yet been announced.

Politicians from across the region are meeting in Paris to discuss Ukraine, as concerns mount that the US will leave the EU out of negotiations.

Expected attendees include leaders from Germany, the UK, Italy, Poland, Denmark, Spain, and the Netherlands.

European Commission President Ursula von der Leyen, European Council President Antonio Costa, and NATO Secretary General Mark Rutte are also expected to attend.

Since his inauguration, US President Donald Trump has shifted the narrative around Russia's war in Ukraine, pushing for a speedy end to the conflict.

Trump said on Sunday he believes he could meet "very soon" with Russian President Vladimir Putin to discuss ending the war, following a lengthy phone conversation with President Putin.

The US secretary of state Marco Rubio, meanwhile, confirmed that he would meet Sergey Lavrov, his Russian counterpart, in Saudi Arabia this week. 

Keith Kellogg, the US special envoy to Ukraine, has said that European leaders would not be included in any discussions between the US and Russian over ending the war.

Kellogg argued that previous negotiations had failed because too many parties had been involved.

The defence stock rally also came after comments made at the Munich