Shares in leading European defence groups moved sharply higher on Monday, with companies such as Leonardo (BIT:LDO), Saab, Rheinmetall (TG:RHM), Renk (TG:R3NK), Hensoldt (TG:HAG), Kongsberg (TG:KOZ1), Dassault Aviation (EU:AM) and BAE Systems (LSE:BA.) posting gains of roughly 4.3% to 7.5% by 04:11 ET (09:11 GMT).

The rally came as geopolitical tensions escalated following a large-scale U.S. military operation in Venezuela over the weekend. During the operation, U.S. forces captured Venezuelan President Nicolás Maduro and his wife, Cilia Flores. Both were subsequently flown to New York, where they are facing drug-trafficking charges.

Addressing reporters on Saturday, U.S. President Donald Trump said Washington would take temporary control of Venezuela to oversee the transition following Maduro’s removal.
“We’re going to run the country until such time as we can do a safe, proper and judicious transition,” Trump said.
He also signalled a willingness to sustain a military presence if necessary, adding, “We’re not afraid of boots on the ground.”

Trump did not outline a specific timetable for the transition, but said the immediate aim was to stabilise the country after the operation. His comments were later softened by U.S. Secretary of State Marco Rubio, who said on Sunday that the United States did not plan to directly govern Venezuela. Rubio indicated that Washington would instead rely on diplomatic and economic pressure to achieve its objectives, stopping short of confirming any formal U.S. administration.

European stock markets opened the week on a firmer footing as investors digested the news. In early trading, the UK’s FTSE 100 was up 0.2%, France’s CAC 40 had gained 0.5%, and Germany’s DAX was higher by 1.1%.

“Almost always, when threats of military action increase, defense budgets move higher, leading to positive trends for defense stocks,” said Bernstein analyst Douglas Harned. “If money is needed for Venezuela or other active combat situations, we expect it will be additive.”

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