Latest news with #defensestocks
Bloomberg
6 hours ago
- Business
- Bloomberg
FTSE 100 on Best Weekly Winning Streak Since January
The bittersweet week is closing out for UK markets. The FTSE 100 is getting closer to its record high, but London suffered a couple of blows in its ambitions to turn around a moribund IPO picture. Here's what's been happening today: The FTSE 100 is up for a sixth day in a row and is creeping closer to notching up a new record high. It's actually outdoing the Magnificent 7 big tech stocks by a fair margin. Surging defence and gold mining stocks are helping the index, as it a shift in its composition. On the former, BAE Systems is now bigger than BP. And on the latter, Fresnillo is outpacing Rio Tinto by a distance. The UK's lack of tech stocks, and the departure of Wise's primary listing, is likely to be a self-perpetuating cycle. And Manchester United shares have surged the most since 2022 in New York as, despite a poor season for the men's team, the club raised its earnings guidance.
Khaleej Times
2 days ago
- Business
- Khaleej Times
Global markets on tenterhooks as 'new cold war' turns hot
As military spending ramps up around the world and countries rush to ringfence critical industries, political rhetoric appears to have darkened from one sketching geopolitical risks to outright preparation for war. Whether global markets should take more note is a moot point. Investors are already preoccupied with a full-blown trade war, which has aggravated international tensions and is much like the latest ratchet in U.S. steel and aluminium tariffs. But it is not hard to find the 'safety' trades thriving. Gold is less than 2% from a record close set a month ago, having climbed almost 30% so far this year. The Swiss franc , also up almost 10% this year, is pushing higher too. Most obvious of all is the nearly 50% rise in European defence stocks since January. Safety trades that have not barked are just as interesting. The dollar's haven status has been undermined by U.S. trade and tax worries and President Donald Trump's domestic institutional upheavals. And government bonds are pressured precisely because the additional defence spending associated with another generational arms race is exaggerating outsized post-pandemic debt loads even more. Global government debt indexes remain in the red for 2025. "Elevated geopolitical risk affects issuers through multiple transmission mechanisms," credit rating firm Fitch said on Friday, adding it "put upward pressure on defence spending, making fiscal consolidation more challenging for certain sovereigns." War drumbeat But at whatever part of the market risk dial you put world war worries, there is no doubt the temperature has risen. Even in the last few days, the language surrounding future major power conflicts has been alarming. Goading Asian allies to match European moves to boost military spending, U.S. Defence Secretary Pete Hegseth warned on Saturday that Chinese military moves to take Taiwan were "imminent". "There's no reason to sugar coat it. The threat China poses is real, and it could be imminent," Hegseth said, adding that any attempt by China to secure Taiwan militarily "would result in devastating consequences for the Indo-Pacific and the world". Beijing reacted angrily and said Hegseth "vilified China with defamatory allegations". But senior U.S. officials have repeatedly briefed that they believe Chinese President Xi Jinping has ordered his military to be ready to invade Taiwan by 2027, even if they say no direct decision appears to have been made. Back in Europe, the drum beat about the need to lift military spending is even louder, more fearful of a threat from Russia. Nearly a trillion euros ($1.14 trillion) of extra German and European-wide defence spending have been earmarked this year. Only last week, Chancellor Friedrich Merz said Germany and its NATO partners were prepared to defend every inch of the alliance's territory. "Anyone who threatens an ally must know that the entire alliance will jointly defend every inch of NATO territory," Merz said on Thursday at a military ceremony in Vilnius to mark the establishment of a German brigade in Lithuania. Britain's strategic defence review on Monday also addressed threats from Russia, nuclear risks and cyberattacks by outlining investment in drones and digital warfare. But the plan also expands the UK's fleet of attack submarines, which are nuclear-powered but carry conventional weapons, and will spend 15 billion pounds ($20.3 billion) by 2029 on replacement of nuclear warheads for its main nuclear fleet. And again, the rhetoric was alarming. "We are being directly threatened by states with advanced military forces, so we must be ready to fight and win," Prime Minister Keir Starmer. 'NEW COLD WAR' TURNS HOT If securing the funding needs political alarm, then maybe that explains some of the high-octane public relations. But there is no shortage of deeply entrenched conflicts raging across the globe and threatening to spill over to varying degrees. Multilateral solutions seem distant as the globe breaks in the blocs. Even with negotiators exploring a ceasefire in Istanbul, Ukraine's forces made an extraordinary move this weekend to attack strategic bomber aircraft at bases deep inside Russia. Israel's devastation of Gaza in reprisal for the 2023 massacres by Hamas shows no sign of ending. More than 30 more Palestinians were killed and nearly 170 injured on Sunday near a food distribution site. Reports continued to circulate last week that Israel is threatening to disrupt nuclear talks between Washington and Tehran by striking Iran's nuclear facilities. And nuclear-armed India and Pakistan have just stepped back from another tense border conflict that marked the fiercest fighting in decades. The expansion of 'hot' conflicts is a mounting concern in political circles, with extraordinary territorial claims thrown into the mix. Trump's public ambition to take over Panama and Greenland have jarred allies, with the latter being part of rivalry over access to rare minerals and also amid strategic plays for the Arctic. Even J.P. Morgan boss Jamie Dimon gets the drift, reportedly telling Barron's last week the United States should not be stockpiling Bitcoin, but instead be stockpiling "guns, bullets, tanks, planes, drones, you know, rare earths." That the world is a dangerous place is not in doubt. A world at war is a different proposition. A worse case scenario is that tariff wars are just the opening act.
Zawya
4 days ago
- Business
- Zawya
Markets anxious as 'new cold war' turns hot: Mike Dolan
LONDON - As military spending ramps up around the world and countries rush to ringfence critical industries, political rhetoric appears to have darkened from one sketching geopolitical risks to outright preparation for war. Whether global markets should take more note is a moot point. Investors are already preoccupied with a full-blown trade war, which has aggravated international tensions and is much like the latest ratchet in U.S. steel and aluminium tariffs. But it is not hard to find the 'safety' trades thriving. Gold is less than 2% from a record close set a month ago, having climbed almost 30% so far this year. The Swiss franc , also up almost 10% this year, is pushing higher too. Most obvious of all is the nearly 50% rise in European defence stocks since January. Safety trades that have not barked are just as interesting. The dollar's haven status has been undermined by U.S. trade and tax worries and President Donald Trump's domestic institutional upheavals. And government bonds are pressured precisely because the additional defence spending associated with another generational arms race is exaggerating outsized post-pandemic debt loads even more. Global government debt indexes remain in the red for 2025. "Elevated geopolitical risk affects issuers through multiple transmission mechanisms," credit rating firm Fitch said on Friday, adding it "put upward pressure on defence spending, making fiscal consolidation more challenging for certain sovereigns." WAR DRUMBEAT But at whatever part of the market risk dial you put world war worries, there is no doubt the temperature has risen. Even in the last few days, the language surrounding future major power conflicts has been alarming. Goading Asian allies to match European moves to boost military spending, U.S. Defense Secretary Pete Hegseth warned on Saturday that Chinese military moves to take Taiwan were "imminent". "There's no reason to sugar coat it. The threat China poses is real, and it could be imminent," Hegseth said, adding that any attempt by China to secure Taiwan militarily "would result in devastating consequences for the Indo-Pacific and the world". Beijing reacted angrily and said Hegseth "vilified China with defamatory allegations". But senior U.S. officials have repeatedly briefed that they believe Chinese President Xi Jinping has ordered his military to be ready to invade Taiwan by 2027, even if they say no direct decision appears to have been made. Back in Europe, the drum beat about the need to lift military spending is even louder, more fearful of a threat from Russia. Nearly a trillion euros ($1.14 trillion) of extra German and European-wide defence spending have been earmarked this year. Only last week, Chancellor Friedrich Merz said Germany and its NATO partners were prepared to defend every inch of the alliance's territory. "Anyone who threatens an ally must know that the entire alliance will jointly defend every inch of NATO territory," Merz said on Thursday at a military ceremony in Vilnius to mark the establishment of a German brigade in Lithuania. Britain's strategic defence review on Monday also addressed threats from Russia, nuclear risks and cyberattacks by outlining investment in drones and digital warfare. But the plan also expands the UK's fleet of attack submarines, which are nuclear-powered but carry conventional weapons, and will spend 15 billion pounds ($20.3 billion) by 2029 on replacement of nuclear warheads for its main nuclear fleet. And again, the rhetoric was alarming. "We are being directly threatened by states with advanced military forces, so we must be ready to fight and win," Prime Minister Keir Starmer. 'NEW COLD WAR' TURNS HOT If securing the funding needs political alarm, then maybe that explains some of the high-octane public relations. But there is no shortage of deeply entrenched conflicts raging across the globe and threatening to spill over to varying degrees. Multilateral solutions seem distant as the globe breaks in the blocs. Even with negotiators exploring a ceasefire in Istanbul, Ukraine's forces made an extraordinary move this weekend to attack strategic bomber aircraft at bases deep inside Russia. Israel's devastation of Gaza in reprisal for the 2023 massacres by Hamas shows no sign of ending. More than 30 more Palestinians were killed and nearly 170 injured on Sunday near a food distribution site. Reports continued to circulate last week that Israel is threatening to disrupt nuclear talks between Washington and Tehran by striking Iran's nuclear facilities. And nuclear-armed India and Pakistan have just stepped back from another tense border conflict that marked the fiercest fighting in decades. The expansion of 'hot' conflicts is a mounting concern in political circles, with extraordinary territorial claims thrown into the mix. Trump's public ambition to take over Panama and Greenland have jarred allies, with the latter being part of rivalry over access to rare minerals and also amid strategic plays for the Arctic. Even J.P. Morgan boss Jamie Dimon gets the drift, reportedly telling Barron's last week the United States should not be stockpiling Bitcoin, but instead be stockpiling "guns, bullets, tanks, planes, drones, you know, rare earths." That the world is a dangerous place is not in doubt. A world at war is a different proposition. A worse case scenario is that tariff wars are just the opening act. The opinions expressed here are those of the author, a columnist for Reuters ($1 = 0.8738 euros) (By Mike Dolan; Editing by Kirsten Donovan and Richard Chang)
Yahoo
6 days ago
- Business
- Yahoo
See why this red-hot FTSE growth stock climbed another 15% in May
May was a good month for the FTSE 100 in general, and this high-powered growth stock in particular. Shares in aerospace and defence firm Babcock International Group (LSE: BAB) climbed 14.7% over the month, beaten by only a handful of stocks. This isn't a one off. The Babcock share price is up 70% in a year, and 200% over two years. Defence stocks have ridden a wave of renewed military spending across Europe, due to Vladimir Putin's invasion of Ukraine and US President Donald Trump's unpredictable response. Is there more to come? Could be. Of the nine analysts giving one-year stock ratings, an impressive eight name it a Strong Buy. None say Sell. Babcock's latest full-year results, published on 23 April, helped set the tone for May. The board anticipates an 11% increase in organic revenues to £4.83bn on a constant-currency basis. Underlying operating profit jumped 17% to £363m, lifting margins from 7% to 7.5%. Babcock's biggest gains came in its nuclear and marine divisions, areas where the backlog of orders remains healthy. The firm converted roughly 80% of operating profit into cash and delivered £153m of free cash flow, despite an extra £40m pension contribution. Revenue growth, profit expansion, and cash generation too – what's not to like? The shares rallied as brokers lifted their outlooks. On 21 May, JPMorgan Cazenove nudged its price target up from 1,000p to 1,100p, and maintained an Overweight rating. It now expects Babcock to deliver average annual earnings per share growth of 10% for the next five years. And with high visibility too. The obvious concern is that Babcock doesn't come cheap. Its price-to-earnings ratio is now pushing 30, edging ahead of fellow defence firm BAE Systems on 27.5 times. Any earnings miss could hit it hard. Rolls-Royce, with its defence exposure (plus a lot more besides), trades on a P/E of almost 42 times. Another concern is that Babcock shares have flown too high, and must ease off from here. That could be the case even if geopolitical concerns continue. The eight analysts serving up one-year share price forecasts have produced a median target of just over 902p. If correct, that's a small drop of around 3.5% from today. PM Keir Starmer's EU trade deal could give Babcock and other UK manufacturers access to a proposed €150bn European defence fund, potentially driving fresh investment. I already hold both BAE and Rolls-Royce, both of which have done brilliantly for me. I'm wary of piling on yet more exposure at this juncture. Babcock has had a splendid run but its pricey valuations appears to factor in much of the good news (given the state of the world, I should probably say bad news). This stock has had a brilliant run, and given the geopolitical state we are in, I expect it to power on. But I also think the big gains have been made for now, so I'll sit tight with what I've got. The post See why this red-hot FTSE growth stock climbed another 15% in May appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
Bloomberg
24-05-2025
- Business
- Bloomberg
China Jets Used in India-Pakistan Clash Spur Defense Stock Surge
By and Ashutosh Joshi Save As the recent military clash between India and Pakistan stunned the world with its intensity, investors were fixated on another aspect of the conflict: the display of cutting-edge military technology. Over the past month, two indexes that track the biggest defense stocks in China — a key military partner of Pakistan — and India surged by more than $36 billion in combined value, thrusting a long-overlooked sector into the spotlight. While China and India have both invested heavily to modernize their military, the latest confrontation offered investors a rare look into their real combat capabilities.
