Defence shares volatile as markets weigh up Ukraine peace deal 

• Peace plan sparked defense stock sell-off, says Rathbones defense analyst Claire Titmarsh, despite likelihood of ongoing hostilities
• Trump’s Thanksgiving deadline to be key in gauging chance of peace deal before Christmas

Commenting, Claire Titmarsh, defense Equity Analyst at Rathbones, one of the UK’s leading wealth and asset management groups, said:

“The US 28-point peace plan for Ukraine includes measures Ukraine has long rejected, such as ceding Donbas territory still under Kyiv’s control, limiting its military size and banning NATO membership. European leaders criticized the proposal as overly favourable to Russia. European counterproposals – such as granting Ukraine a US security guarantee similar to NATO’s Article 5 – highlight what the US plan implies: Ukraine surrendering sovereign territory and its ability to defend itself.

“Despite deep divisions between Russia and Ukraine, a joint US-Ukraine statement described talks over the weekend in Geneva as ‘constructive, focused, and respectful’, marketing the most progress in peace negotiations yet. President Trump is also pushing Ukraine to accept the plan by Thanksgiving. News of the plan triggered a sell-off in defense stocks, even though the proposal in its current would not significantly reduce the risk of future Russian aggression.

“Meanwhile, the war continued over the weekend with Russian drone strikes killing four people and wounding seventeen in Kharkiv on Sunday.

“To gauge progress in Ukraine peace talks this week, watch for whether the US extends its Thanksgiving deadline or confirms a Washington visit, any shift in Zelensky’s tone towards compromise, and signs of convergence on European counterproposals. Kremlin reaction and readiness to negotiate will be critical. Ongoing uncertainty is likely to keep European defense shares volatile as markets weigh the chances of a deal.”

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