Proactive Investors - BAE Systems (LON:BAES) and Rolls-Royce Holdings PLC (LON:RR) sat as the FTSE 100’s two biggest fallers on Monday as reports emerged Germany was to cut military support for Ukraine.
BAE and Rolls-Royce fell by 2.8% and 2.0% respectively on the back of news Germany could stop sending new military aid to Ukraine under government cutbacks.
According to The Frankfurter Allgemeine Zeitung, the German Finance Ministry is looking to scale back on support for Ukraine as part of budgetary savings this year.
This follows an agreement between the ruling coalition of the Social Democrats, the Greens and the Liberals last month, which had detailed plans for Germany - Europe’s main supplier of aid to Kyiv - to cut support by half to €4 billion (£3.4 billion) next year.
Under plans seen by the Frankfurter Allgemeine Zeitung, this would then fall to €3 billion in 2026 and €500 million in each of the following two years.
A letter from finance minister Christian Lindner in early August since said new support would no longer be funded by Germany’s federal budget.
Instead, funding is set to come from “European sources” and frozen Russian assets, though when this support will flow remains to be seen.
London-listed defence firms slipped on the news, with Melrose Industries (LON:MRON) also among the FTSE 100’s biggest fallers.