Defense stocks fall on news that Germany will cut its support for Ukraine

London-listed defense stocks fell on Monday following reports that Germany plans to cut military aid to Ukraine.

German newspaper FAZ The German Ministry of Defence plans to reject further requests for assistance after having provided the previously agreed aid.

The reports sent defence stocks lower across Europe, with the FTSE All-Share aerospace and defence index down as much as 1 per cent in early trading.

BAE Systems shares led the losses as midday approached, falling 2.5 percent, while Rolls Royce fell by 1.3 percent and Melrose, Babcock and Chemical ring They also fell between 0.5 and 1 percent each.

Earlier this summer, the German government announced it would halve funding for kyiv, from the current level of €8bn (£6.8bn) to just €4bn by 2025.

A draft budget seen by the Frankfurter Allgemeine Zeitung newspaper reveals further cuts, with spending slashed to just 500 million euros in 2027.

But Ukraine’s Foreign Ministry has dismissed the reports, describing them as a “manipulation” to local news agency Ukrinform.

The war in Ukraine has proven to be a major driver for the defence sector, with increased geopolitical momentum driving up military spending globally.

The FTSE All-Share aerospace and defence sector has risen 68.8 per cent over the past year.