Defence stocks including BAE Systems have surged on the outlook for increased spending by NATO allies.
Their moves came as Keir Starmer said the UK is ‘ready and willing’ to send peacekeeping troops to Ukraine if a deal is reached to end conflict.
In corporate developments, another FTSE 250 firm is in the sights of private equity after KKR’s £1.6 billion approach to Assura.
FTSE 100 Live Monday
- Assura rejects KKR's £1.6bn approach
- Mony revenues hit new high
- Springfield strikes Barratt land deal
Market update: Defence and banking stocks rally in FTSE 100, Assura up 17%
10:10 , Graeme EvansBAE Systems led a surge for FTSE 350-listed defence stocks today as investors positioned for a potential boost to military spending by NATO allies.
The strong reaction came as Keir Starmer said the UK is ‘ready and willing’ to send peacekeeping troops to Ukraine if a deal is reached to end conflict.
NATO secretary general Mark Rutte also said at the weekend that members will have to boost their defence spending by considerably more than 3% of GDP.
BAE shares jumped 5% or 65.1p to 1293.1p, although this is still short of the record peaks seen near 1400p in June and November last year.
Despite the potential for US defence spending cuts in the event of a Russia-Ukraine peace deal, Saxo’s chief investment strategist Charu Chanana said this could be offset by rising pressure on NATO allies to boost spending.
She said: “Periods of policy uncertainty often create buying opportunities, particularly in high-quality defence names with strong backlogs or global diversification.”
In the FTSE 250 index, the shares of defence technology business Qinetiq rose 3% or 12.4p to 380.8p and countermeasures business Chemring lifted 4% or 12.9p to 327.9p.
Other sectors on the front foot today included banking after strong sessions for NatWest and Barclays in the aftermath of last week’s annual results.
NatWest put back 3% or 12.6p to 440.7p, having fallen on Friday, while Barclays improved 8.35p to 302.95p.
HSBC, which is due to report figures on Wednesday, rallied 9.7p to 879.4p and Lloyds Banking Group cheered 0.4p to 64.6p ahead of Thursday’s results.
Wall Street’s holiday for Presidents’ Day meant thin trading volumes elsewhere in London as the FTSE 100 index edged 13.98 points higher at 8746.44.
The FTSE 250 index rose 0.3% or 55.23 points at 20,968.24, boosted by a rise of 17% for healthcare landlord Assura as the latest mid-cap target for private equity.
The fourth in a series of approaches by Kohlberg Kravis Roberts valued Altrincham-based Assura at £1.56 billion, a 26% premium to Thursday’s undisturbed price.
KKR called it a “highly attractive opportunity” and said it is now reviewing its options in light of Assura’s latest rejection.
The UK company has a £3.2 billion portfolio of 608 healthcare buildings, from which over six million patients are served.
Mony Group shares rose 8.4p to 198.3p after the owner of the Moneysupermarket price comparison site reported record annual revenues of £439.2 million and operating profit up 7% to £141.8 million.
Membership of its SuperSaveClub has passed one million, with the company comfortable with 2025 expectations despite a recent softening of premium inflation in car insurance.
It increased the total dividend by 3% and pledged to spend up to £30 million buying back shares.
On AIM, Springfield Properties jumped 9% or 8.9p to 107.4p after the Scotland- focused housebuilder unveiled a major land sale to Barratt Redrow.
The affordable homes specialist is selling 2480 plots with planning consent across six sites for £64.2 million. It also lifted guidance for 2025 alongside today’s interim results.
Springfield unveils Barratt Redrow deal, lifts guidance
09:10 , Graeme EvansThe shares of Scotland-focused housebuilder Springfield Properties have jumped 13% or 12.5p to 111p after it unveiled a major land sale to Barratt Redrow.
The affordable homes specialist is selling 2480 plots with planning consent across six sites for £64.2 million.
Springfield said the proceeds will be received over four years and will be used to cut debt and to capitalise on the “significant growth opportunities” emerging in the North of Scotland.
AIM-listed Springfield also posted a 14% rise in half-year adjusted operating profit to £6.4 million and said its 2025 results should be significantly ahead of market expectations.
Chief executive Innes Smith said: “The housing market continues to be influenced by the wider economy and subdued confidence resulted in a dip in reservation rates from mid-December.
“However, we are currently seeing an increase in visitor levels, bolstered by the reduction in interest rates earlier this month, giving us optimism that reservation rates will recover in the near term.”
Week ahead: Labour and inflation figures due, Lloyds in spotlight
08:54 , Graeme EvansThe week ahead includes results by BAE Systems and HSBC on Wednesday, followed by Centrica and Lloyds Banking Group on Thursday.
Labour market figures due tomorrow are set to show an increase in December’s unemployment rate to 4.5%, from 4.4% previously. Annual growth in average weekly earnings is seen reaching 5.9% for the quarter, up from 5.6%.
The following day’s inflation report is likely to show an uptick in January’s annual rate of headline CPI to 2.8% from 2.5% previously.
Retail sales and public sector borrowing figures are due for release on Friday.
BAE Systems up 5% in flat FTSE 100, Mony shares up 6%
08:36 , Graeme EvansDefence-focused stocks have opened sharply higher, with BAE Systems up 5% or 67p to 1295p at the top of the FTSE 100 index.
The outlook for increased military spending also boosted FTSE 250-listed Qinetiq by 3% or 11p to 379.4p and Chemring by 4% or 12p to 327p.
The FTSE 100 index rose 6.69 points to 8739.15, reflecting thin dealing volumes due to today’s Wall Street holiday.
Rolls-Royce shares also lifted 12.6p to 637.2p and Barclays improved 5.9p to 300.5p during a strong session for the banking sector.
Moneysupermarket business Mony added 6% or 12.1p to 202p in the FTSE 250 after it included £30 million buy back of shares with annual results.
The takeover interest of KKR meant Assura shares jumped 17% or 6.8p to 45.8p while fellow healthcare landlord Primary Health Properties lifted 5% or 4.45p to 96.2p.
Assura rejects new KKR approach worth £1.56bn
07:42 , Graeme EvansThe private equity giant circling FTSE 250-listed Assura today said it has been unsuccessful with a fourth takeover proposal to the healthcare landlord.
The latest 48p-a-share approach by Kohlberg Kravis Roberts (KKR) valued Assura at £1.56 billion, a 26% premium to Thursday’s price.
KKR called it a “highly attractive opportunity” for Assura shareholders to realise their investment in cash at a significant premium.
It added: “KKR is considering whether there is any merit in continuing to try and engage with the board.
“There can be no certainty that any firm offer for the company will be made. A further announcement will be made as and when appropriate.”
Altrincham-based Assura has a £3.2 billion portfolio of 608 healthcare buildings, from which over six million patients are served.
The shares recently traded at a multi-year low of 36p and closed on Friday at 39p prior to the disclosure of KKR’s bid interest.
The stock lifted 17% or 6.6p to 45.6p following KKR’s announcement this morning.
Mony Group revenues set record, facing car insurance headwinds
07:21 , Graeme EvansMoneysupermarket business Mony Group today reported record annual revenues of £439.2 million, a rise of 2% on a year earlier.
The comparison site’s Insurance arm rose 7% to £235.6 million, although the softening of car and home premium inflation slowed the final quarter to 2%.
Home Services growth was flat in the quarter, with some improvement in energy switching helping to offset continued challenges in broadband and mobile from provider retention strategies.
The Money segment was down 2% in the quarter due to fewer attractive current account deals. Borrowing continued to grow, driven by improved credit card switching volumes. Revenue from Travel fell 6% in the quarter.
Operating profit for the year rose 7% to £141.8 million, with the company confident it is on track to meet 2025 City forecasts.
Chief executive Peter Duffy said: “Despite headwinds in the car insurance switching market, strength in our breadth provides us with resilience and we continue to see other opportunities for growth across the business.”
A final dividend of 9.2p lifts the total for 2024 by 3% to 12.5p a share, while the group has announced a share buyback programme of up to £30 million.
Sterling at two-month high, FTSE 100 seen flat
07:01 , Graeme EvansSterling is at a two-month high of $1.26 as attention turns to this week’s release of jobs market, inflation, retail sales and public sector borrowing figures.
The FTSE 100 index closed Friday’s session 0.4% lower at 8732.46, with IG Index futures pointing to a broadly flat start this morning.
On Wall Street, the tech-focused Nasdaq Composite posted the best performance by adding 0.4% to extend its weekly advance to 2.6%.
The Dow Jones Industrial Average closed the session down 0.4% while the S&P 500 index finished slightly lower.
Leading Asia markets are close to their opening marks while gold stands at $2896 an ounce and Brent Crude at $74.91 a barrel.
