Shares in European Defense Firms Climb After Putin Declares Partial Mobilization

By Scott Kanowsky 

Investing.com -- Shares in European defense firms rose on Wednesday after Russian president Vladimir Putin declared a partial mobilization of the country's military reserve to support the invasion of Ukraine.

Military equipment producers, including Germany's Rheinmetall AG (ETR: RHMG ), France's Thales (EPA: TCFP ) and Italy's Leonardo SpA (BIT: LDOF ), jumped following Putin's announcement earlier this morning, with expectations growing that his decision will further extend the seven-month-old conflict.

Mobilization would be limited to those who have already served in the armed forces, and who have relevant experience and training, Putin said.

Russian defense minister Sergey Shoigu said in a subsequent televised address that the move would only impact 300,000 people. The country's military reserve was estimated by the International Institute for Strategic Studies at over two million in a book published last year.

Putin also backed upcoming referenda on joining Russia that will be held from September 23 - September 27 in the Kherson and Zaporizhzhya regions, as well as the so-called Donetsk and Luhansk People's Republics - two states set up by the Kremlin in 2014.

He added that the votes aim to provide protection for Russian-speakers from Ukrainian forces carrying out a counteroffensive in the country's east.

"If Russia’s territorial integrity is threatened we will use all means at its disposal. This is not a bluff," Putin said.

Observers have claimed that the outcome is all but decided, with Russia itself in charge of the poll and officials in Moscow saying 90% of citizens in these areas are in favor of annexation. U.S. leaders, who have strongly supported Ukraine during the war, have called any results a "sham."