Surge in European far right hits defence stocks
** Shares in European defence companies are down sharply on fears that an ascendance of the far right in Europe will endanger increased defence spending, ODDO BHF analyst Yann Derocles and a trader have told Reuters
** In Germany, artillery shell- and vehicle-maker Rheinmetall RHMG.DE fell as much 9% at one point, before recovering about half of those losses. Radar maker Hensoldt HAGG.DE is down 4.7% and tank gearbox maker Renk R3NK.DE down 8.5%
** The market likely thinks that results for Chancellor Olaf Scholz' Social Democratic Party in recent European elections weaken his position, making the governing coalition's negotiations over the defence budget more difficult, Derocles says
** French markets have been hit the hardest this week, after President Emmanuel Macron's surprise decision to call an election
** The market also thinks that Europe's far right wing parties, if in power, would likely adopt a friendlier stance towards Russia, the trader says
** France's Thales TCFP.PA has been falling throughout the day and is down 5.3% as of 1036 GMT
** Britain's BAE Systems BAES.L is down 3.8%
Reporting by Louis van Boxel-Woolf and Samuel Indyk; Editing by Amanda Cooper
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