FRANKFURT (dpa-AFX) - Rheinmetall shares recovered from their Friday weakness on Monday. With a price increase of up to more than 4 percent, they made up for a large part of the losses they had suffered before the weekend in an environment of generally rising defense stocks. They were the best DAX stock on Monday morning, but are still looking for direction on the chart. For days now, the Rheinmetall share price has been oscillating around the 21- and 100-day lines, which run directly into each other. On Monday, they made it back above these two indicators for the trend of different durations. The 50-day line is now waiting just above it.
In the defence sector, the shares of SDax stock Renk rose by 3.3% on Monday after a weak Friday. Hensoldt shares rose by 1.8 percent in the MDax. On Monday, traders referred to the ongoing debate surrounding the defense budget. One trader highlighted a media report at the beginning of the week according to which NATO will need up to 50 more brigades under new defense plans.
On Tuesday, the NATO summit begins in Washington with celebrations to mark the 75th anniversary of the defense alliance. It is taking place during a period of political uncertainty after US President Joe Biden's suitability as a presidential candidate was publicly questioned. It is unclear where the US is heading if former US President Donald Trump is returned to office in the November election.
According to one market participant, the recovery in Rheinmetall shares is also to some extent a counter-reaction to the almost five percent drop in the share price on Friday. Last week, the leaders of the traffic light coalition granted the Bundeswehr an increase in the regular defense budget of 1.2 billion euros for the coming year. Defense Minister Boris Pistorius had announced a significantly higher requirement for upcoming armaments projects./tih/gl/zb
