Banks and defence stocks help lift FTSE 100 after Starmer ups security spending
Banking stocks and weapons-maker BAE Systems helped lift London's FTSE 100 higher on Tuesday, as the Prime Minister announced the biggest hike to defence spending since the end of the Cold War.
The blue-chip index gained 9.69 points, or 0.11%, to close at 8,668.67.
Lloyds, HSBC and NatWest were all climbing with gains of about 2%, while BAE Systems rose 3% following Sir Keir Starmer's speech.
The plan to slash the current aid budget will see defence spending rise from the current 2.3% share of the economy to 2.5% from 2027.
It comes three years after Russia's full-scale invasion of Ukraine, and amid uncertainty over US President Donald Trump's commitment to European security.
Sir Keir will travel to Washington later this week for talks with the US president, who has repeatedly pushed for Europe to increase its defence spending.
A weaker session for mining stocks hit the FTSE 100 on Tuesday as oil prices fell sharply.
The price of Brent crude oil was down about 2.2% to 74.10 US dollars per barrel.
In Paris, the Cac 40 was down 0.49%, and in Frankfurt, the Dax moved 0.13% lower.
Over in New York, the S&P 500 was down about 0.8%, and the Dow Jones was more or less flat by the time European markets closed.
The pound was rising 0.25% against the US dollar, at 1.266, but down 0.1% against the euro, at 1.205.
In company news, Smith & Nephew rose to the top of the FTSE 100 after the medical technology firm reported a recovery in sales in the US.
The company, which has business lines that include making high-tech knee and hip implants, had been in the midst of a turnaround plan and recently faced calls from its biggest investors to break up the business.
Smith & Nephew said it had made 'solid progress fixing the foundations' and it was expecting a 'step-up in returns in 2025'. Its share price closed 6.1% higher.
Unilever announced its chief executive Hein Schumacher will leave next month after less than two years in the top job, a decision it said had been made 'by mutual agreement'.
He will be replaced by chief financial officer Fernando Fernandez who had been appointed to the finance position in January 2024.
Unilever's share price dipped following the unexpected changeover at the top, and was down 1.3% at close.
The biggest risers on the FTSE 100 were Smith & Nephew, up 64p to 1,107.5p, BAE Systems, up 61p to 1,366p, HSBC, up 21.8p to 899.5p, Natwest Group, up 9.6p to 453.3p, and GSK, up 31p to 1,483.5p.
The biggest fallers on the FTSE 100 were Polar Capital Technology Trust, down 15p to 336p, Rio Tinto, down 167p to 4,840p, Endeavour Mining, down 55p to 1,619p, Scottish Mortgage Investment Trust, down 34.5p to 1,039.5p, and Ashtead, down 147p to 4,689p.
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