A basket of European defense companies from Goldman Sachs rose by as much as 2.8 percent, where German industry giant Rheinmetall increased by 1.4 percent and British BAE Systems rose by 1.6 percent. Swedish Saab AB rose on Wednesday by nearly five percent to a record high level.
In Asia, South Korean companies led the gains. The shares in Hanwha Aerospace, the country's largest defense supplier, rose by as much as 5.9 percent. The company has been in talks with countries in Western Europe to help them expand their weapons production capacity.
Korea Aerospace Industries and Hyundai Rotem rose by at least 4 percent each, Japanese IHI climbed almost 10 percent.
The defense sector has been hot on the stock markets lately due to increased geopolitical tensions around the world as well as expectations of increased military budgets.
