European defense stocks dip as Israel-Hamas ceasefire deal fuels de escalation hopes

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* Shares of European defense companies fell sharply on Friday, extending losses after Israel’s cabinet approved a deal for Hamas to release all remaining hostages in Gaza in exchange for about 2,000 prisoners.
* Top decliners included Leonardo (OTCPK:FINMF [https://seekingalpha.com/symbol/FINMF]), Hensoldt (OTCPK:HNSDF [https://seekingalpha.com/symbol/HNSDF]), Renk (OTCPK:RNKGF [https://seekingalpha.com/symbol/RNKGF]), Kongsberg (OTCPK:NSKFF [https://seekingalpha.com/symbol/NSKFF]), QinetiQ, Babcock (OTCPK:BCKIF [https://seekingalpha.com/symbol/BCKIF]), Saab (OTCPK:SAABF [https://seekingalpha.com/symbol/SAABF]), and BAE Systems (OTCPK:BAESF [https://seekingalpha.com/symbol/BAESF]), falling between 2.2% and 5%. Rheinmetall (OTCPK:RNMBF [https://seekingalpha.com/symbol/RNMBF]) was down 2%.
* A Goldman Sachs basket of European defense names is down 3%, falling for a second consecutive session and dragging on the broader Stoxx 600, which is broadly flat.
* The agreement is seen as a key step toward ending the two-year warfare that has claimed tens of thousands of lives and shaken the region.
* According to the text of the deal released on Friday by Prime Minister Benjamin Netanyahu’s office, the Israeli military would move to new deployment lines inside Gaza by early Saturday. Hamas would then have 72 hours to return all the hostages, including the bodies of those who have died.

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