Defence giant BAE Systems has helped lift London’s FTSE 100 higher with investors anticipating greater military spending as European leaders hold emergency talks over the Ukraine war.
The UK’s top stock market index moved 35.55 points higher, or 0.41%, to close at 8,768.01.
BAE Systems, which makes weapons, military vehicles and aircraft, saw its share price jump by about 9% on Monday, taking it to the top of the FTSE 100.
It came as Sir Keir Starmer arrived in Paris for emergency talks with fellow European leaders over Russia’s war in Ukraine, after US President Donald Trump has been pushing for a deal with Russia’s President Vladimir Putin.
The Prime Minister said the UK and Europe need to “step up” in terms of their collective response, and ensure any peace agreement would be long-lasting.
Sir Keir is, nonetheless, not expected to increase defence spending beyond current commitments.
Banking stocks Barclays and NatWest were also among the day’s biggest risers with gains of more than 3% after both companies reported their full-year, financial results last week.
Defence giants were also boosting stock exchanges in other European capitals on Monday.
In Frankfurt, the Dax was up 1.26% to hit a new record high, with the share price of Germans weapons-maker Rheinmetall surging more than a 10th.
In Paris, the Cac 40 index rose 0.13%.
Over in the US, stock markets were closed for the Presidents’ Day public holiday.
Konstantin Oldenburger, a market analyst for CMC Markets, said: “While the US intends to negotiate a resolution to the war exclusively with Russia and Ukraine, it appears they will leave potential, peacekeeping responsibilities to the Europeans, who will need to significantly boost their defence budgets to do so.
“The notion that the Americans wish to wind down military support for the region has not been new, especially since Trump’s election victory.
“However, vice president JD Vance’s appearance in Munich made it abundantly clear that Europe must invest heavily to be taken seriously by the US regarding its defence capabilities.”
Meanwhile, the pound was strengthening against key currencies on Monday, gaining about 0.4% against the US dollar, at 1.261, and 0.3% against the euro, at 1.203.
In other company news, shares in MoneySupermarket owner Mony Group lifted about 5% after telling shareholders it will hand out higher dividends and launch a share buyback.
It came after the company reported record revenues in 2024, as it benefited from growth in its insurance arm, and saw its pre-tax rise by 11% compared with 2023. Shares in Mony Group closed 4.8% higher.
Elsewhere, property and GP surgery owner Assura rejected a fourth takeover approach from US private equity firm Kohlberg Kravis Roberts (KKR), which valued the firm at £1.56 billion.
Assura’s share price was 9% higher at close, after KKR said it was considering whether to continue engaging with the board following the latest rejection.
The biggest risers on the FTSE 100 were: BAE Systems, up 110p to 1,338p; Schroders, up 13.2p to 384.8p; Barclays, up 9.8p to 304.4p; St James’s Place, up 31p to 1,133p; and Entain, up 20p to 764.4p.
The biggest fallers on the FTSE 100 were: British American Tobacco, down 65p to 3,025p; Segro, down 15p to 716.4p; Lloyds, down 1.24p to 62.92p; Airtel Africa, down 2.6p to 143p; and Fresnillo, down 14p to 784.5p.
