High-flying European defence stocks are taking a knock. Shares in German arms manufacturer Rheinmetall tumbled 5 per cent in early trading on Monday, while the UK’s BAE Systems lost 2.5 per cent. Investors took fright at reports that Germany’s finance minister planned to veto new military aid to Ukraine.

Perspective is in order. The Euro Stoxx Aerospace and Defense index has roughly doubled since Russia invaded Ukraine in February 2022, putting it in a different league to the 7 per cent rise notched up by the broader Stoxx 600 benchmark.

Swelling sales, order books and profits justify much of that. Valuations for the likes of Rheinmetall and BAE have roughly doubled as a multiple of total enterprise value to ebit, based on S&P Capital IQ data.