FILE PHOTO: An Army Tactical Missile System (ATACMS) is displayed during the inauguration of a new artillery plant of ammunition maker Rheinmetall, in Unterluess, Germany August 27, 2025. REUTERS/Annegret Hilse/File Photo

(Reuters) -European defence shares fell to their lowest levels since early September on Friday, after Ukrainian President Volodymyr Zelenskiy said he was ready for "honest" work on a U.S.-backed plan to end the war.

An index of aerospace and defence companies was last down 2.6%.

The index, which has risen more than 200% since Russia launched its war against Ukraine in February 2022, was heading for its biggest weekly losses since mid-October.

Shares in Germany's Renk fell around 6%, on track for a sixth straight day of losses.

Hensoldt and Rheinmetall were both down around 4%.

Italy's Leonardo, Sweden's Saab slipped between around 2% and 3%.

JPMorgan analysts wrote in a note earlier this week they saw the plan as not acceptable to Ukraine or its European allies, and viewed the recent selloff in defence companies as a "compelling entry point" into the sector.

"If the U.S. is able to impose this plan (which is unlikely, in our view) we think it would amount to a de facto victory for Russia, driving European defence spending even higher than planned and at a much faster pace," they wrote.

(Reporting by Anna Pruchnicka, editing by Alun John and Dhara Ranasinghe)