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Shares in defense contractors and their suppliers are rallying on Friday after the US launched a military strike on Syria, sparking fears of a broader escalation of conflicts in a region that is already rife with them.
Raytheon Company, the maker of the Tomahawk missiles used to attack a Syrian airfield late Thursday night, rose 1.6 per cent to $153.12, near the record right of $157.59 reached last week.
Lockheed Martin, the world’s number one weapon supplier, is also trading near its all time highs after the stock climbed 1.5 per cent to $271.07. Northrop Grumman is up 1.3 per cent at $239.6, while Boeing tacked on 0.8 per cent to $178.85.
Defense contractors have been on a tear over the past 18 months as governments across the globe ramp up their defense budgets in response to conflicts in the Middle East and following a string of deadly terrorist attacks across Europe and Turkey. The stocks got another bump after Donald Trump followed through with his campaign promise to increase defense spending, proposing in February a $54bn, or 10% rise military’s annual outlays.
The US military strike in Syria has quickly drawn a rebuke from Russia.
Russian prime minister Dmitry Medvedev on Friday said the strikes had “completely ruined relations” between the US and Russia and that the two countries were now “on the verge of a military clash”.