Nov 24 (Reuters) - Shares of European arms makers fell for a second successive session on Monday to their lowest in more than four months as peace talks on ending the war in Ukraine continued.
Washington and Kyiv said in a joint statement they had drafted a "refined peace framework" after talks in Geneva on Sunday.
An index of aerospace and defence companies was down 2% at 1354 GMT at its lowest since early July. It fell 3.4% on Friday and logged its biggest weekly loss since March.
The wider European STOXX 600 index was flat.
REARMAMENT PLANS UNLIKELY TO ROLL BACK
Defence stocks have helped to push the STOXX 600 index 11% higher this year, hitting successive record highs on the back of the prospect of surging government spending on security in the region.
And despite the recent selloff, the aerospace and defence index is still up 48% year to date - among the best performing indexes in Europe.
Some analysts think the sector can continue to gain.
The market reaction is "overstated," Loredana Muharremi, an analyst at Morningstar wrote in a note shared via email, adding that the selloff reflected short-term headlines, not fundamentals.
"European defence valuations are anchored in structural budget increases rather than short-term Ukraine revenues, and rearmament plans are unlikely to reverse even in the event of a peace agreement," Muharremi said.
On Monday, though, shares in Germany's Renk were down around 4%, following a 6% slide on Friday. Sensor systems maker Hensoldt was also down some 4% after falling 6.6% on Friday.
Rheinmetall dropped 4%, while Italy's Leonardo, Sweden's Saab and France's Thales were down between 2% and 3.7%.
Reporting by Anna Pruchnicka; Editing by Amanda Cooper and Alun John
Source: Reuters