Shares of European defense companies rise after Putin declares partial mobilization

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Shares of European defense companies 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 manufacturers, including Germany’s Rheinmetall AG (ETR: RHMG ), France’s Thales (EPA: TCFP ) and Italy’s Leonardo SpA (BIT: LDOF ), soared after Putin’s announcement this morning, with expectations growing belief that his decision will further prolong the seven-month conflict.

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

Russian Defense Minister Sergei Shoigu said in a later televised speech that the measure would affect only 300,000 people. The country’s military reserve was estimated by the International Institute for Strategic Studies at more than two million in a book published last year.

Putin also backed the upcoming referendums on joining Russia to be held from September 23 to 27 in the Kherson and Zaporizhzhya regions, as well as in the so-called Donetsk and Luhansk People’s Republics, two states created by the Kremlin in 2014.

He added that the votes are aimed at providing protection for Russian-speakers from Ukrainian forces carrying out a counter-offensive in the east of the country.

“If the territorial integrity of Russia is threatened, we will use all means at our disposal. This is not a bluff,” Putin said.

Observers have claimed the result is all but decided, with Russia itself running the poll and officials in Moscow saying 90% of citizens in these areas are in favor of annexation. US leaders, who have staunchly supported Ukraine during the war, have called any outcome a “farce.”

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