LIVE MARKETS-Time to invest in defence?

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TIME TO INVEST IN DEFENCE?

European aerospace and defence stocks .SXPARO are falling again on Monday and are down about 13% since the U.S. launched its attack on Iran in late February.

Companies such as BAE Systems BAES.L, Leonardo LDOF.MI and Thales TCFP.PA are down over 10%, while Germany's Rheinmetall RHMG.DE has dropped almost 30% since the war began.

The sector has been inversely correlated to energy prices, with investors viewing that higher oil & gas could require a fiscal response, and potentially delay defence procurement in Europe.

Are investors right to be cautious?

Barclays says it's fair to be wary of the delay risks, but so far has seen no evidence that this could impact the structural investment case in the sector, particularly the German companies.

The company continues to favour Rheinmetall and Leonardo post first-quarter earnings, with both names trading at a discount to the wider sector.


(Samuel Indyk)

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EARLIER ON LIVE MARKETS:

IRAN WAR IMPASSE CONTINUES, EUROPEAN STOCKS MIXED CLICK HERE

EUROPE BEFORE THE BELL: PEACE TALKS SUFFER ANOTHER HICCUP CLICK HERE

PEACE PROGRESS STALLS, AI RALLY DOES NOT CLICK HERE


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