(new: updated price reaction, more background)

FRANKFURT/DÜSSELDORF (dpa-AFX) - The inclusion of Rheinmetall in Germany's leading index, the Dax, caused the arms and technology group's share price to jump on Monday. Thanks to brisk investor demand, shares in the armaments group rose by a good 5 percent to just under 250 euros by the afternoon. On its first day on the Dax, the Group thus took the top spot on Germany's leading index.

Rheinmetall is Germany's largest armaments group. In military vehicles and in the ammunition business, the company ranks among the three largest manufacturers in the Western world, according to its own figures. Rheinmetall currently has a stock market value of over 10 billion euros. Since the Russian invasion of Ukraine just over a year ago, the share price has more than doubled. In its civilian-oriented sectors, Rheinmetall is a supplier to the automotive industry, among others.

In Germany's premier stock market league, the Düsseldorf-based company replaces dialysis specialist Fresenius Medical Care (FMC), which has been relegated to the mid-cap index, the MDax.

"We are pleased that it is not only the capital markets that attach significantly increased importance to us," Rheinmetall CEO Armin Papperger said, according to a statement. He added that broad sections of society also see the need to equip the armed forces quickly and reliably with modern equipment and armaments. Rheinmetall sees itself as part of national and European security provision.

Last year, Rheinmetall employed an average of 24,800 people, some 1,100 more than the year before. Papperger expects another 3000 to be added this year.

Founded in 1889, the company has been listed on the stock exchange since 1894, when it was still called "Rheinische Metallwaaren- und Maschinenfabrik Actiengesellschaft". In 1996, Rheinmetall was a founding member of the Mdax. Since then, the company has been listed on this stock index without interruption.

There was also support for Rheinmetall from analysts. The increasing demand for military equipment and rising defense spending in Germany and other NATO countries hold attractive medium-term potential for the company, stressed analyst Holger Schmidt of DZ Bank. Analyst David Perry of US bank JPMorgan raised his price target from 265 to 310 euros. According to his assessment, Rheinmetall should be the main beneficiary of the lavish ammunition deliveries to Ukraine. The rise in the Dax index should also give the share price a boost, as this would make the stock more interesting again for certain investors.

With a price jump of around 32 percent, Rheinmetall shares are clearly the best Dax stock in the still rather short course of the year./edh/tob/rea/