FRANKFURT (dpa-AFX) - Rheinmetall shares continued their record rally on Tuesday, benefiting further from hopes of new orders. In the afternoon, the shares of the defense contractor were clearly at the top of the weak leading index Dax with a plus of 4.1 percent at 363.20 euros. In early trading, the shares had reached a high of 365.20 euros.

The shares of the Bavarian arms manufacturer Hensoldt rose by 5.3 percent - the lone leader in the mid-cap index MDax. The shares of defense supplier Renk even shot up by almost 16 percent. The company only went public on Wednesday last week.

According to the US investment bank Jefferies, Donald Trump's statements on Russia highlight the urgency of defense investments by the European Union. The former US president had indicated that the USA would not protect NATO states attacked by Russia if they did not spend enough on defense.

Trump's statements were met with strong criticism from several German politicians and NATO Secretary General Jens Stoltenberg, among others. Jefferies commented: "Even if these statements were made in the context of an election campaign, they increase the pressure on European states to stick to their promised spending plans." NATO members have agreed to spend at least 2 percent of their gross domestic product on defense. So far, the majority of member states have not reached this level.

Traders are now blaming new political demands for higher defense spending for the price gains in the arms industry. They refer, for example, to statements by CDU defense politician Roderich Kiesewetter, who expressed his openness to a significant increase in the 100 billion euro special pot for the Bundeswehr. According to him, the Bundeswehr needs "300 rather than 100 billion" in special funds in order to become "fit for war".

At the beginning of February, DZ Bank had already confirmed its own buy recommendation for Rheinmetall shares at an increased fair value of 376 euros per share. The bank justified this with higher capacities and "additional value creation at low costs" following Rheinmetall's participation in a military vehicle manufacturer.