European aerospace and defence stocks fell by more than 3% on Wednesday amid signs of renewed pressure from the United States aimed at ending the war between Russia and Ukraine, which also contributed to a rise in the value of Ukrainian government bonds.

Source: Reuters

Details: The STOXX Europe Total Market Aerospace & Defense Index dropped to its lowest level since early September and was down 2.6% by 13:22 GMT, marking its biggest one-day fall in over a month.

Shares in Rheinmetall, Renk, BAE Systems, Leonardo and Saab were among the biggest losers on the broadly stable pan-European STOXX index, with declines ranging from 4% to 7%.

Two Reuters sources pointed to a Politico article about a framework agreement on Ukraine as the reason for the drop.

Ukraine has received signals about a number of US proposals on ending the war, which Washington discussed with Russia, a senior Ukrainian official told Reuters on Wednesday.

Background:

• The White House has expressed optimistic expectations of agreeing a framework for ending the war in Ukraine by the end of the month, although Ukraine may be presented with the potential plan agreed with Russia as a fait accompli.
• According to the publication, the White House is on the verge of announcing a new "significant peace deal" with Russia which, officials say, will finally bring an end to the three-year war with Ukraine.
• The new peace plan, it appears, does not take into account the views of Ukraine or America's European allies.

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