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London stocks jumped to fresh record highs in early trade on Monday, with defence names surging on the prospect of increased spending
At 0835 GMT, the FTSE 100 was up 0.4% at 8,844.20.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The Footsie has surged into the green in a spurt of Monday motivation, with the index hitting a fresh record level. Better prospects for China’s economy and the expectation of increased state spending on military capabilities are offsetting jitters about fraught geo-politics and US tariffs concerns.
“Defence contractors leading the charge higher, with BAE Systems up by more than 18% in early trade. The shocking clash between Trump, Vance and Zelensky has brought the need for Europe to increase collective security into sharp focus. A show of co-operation among leaders at the weekend in London has reinforced expectations that military budgets will swell in a new era of collaboration to counter the Russian threat.”
Sentiment was also boosted by the latest survey out of China, which showed that activity in the manufacturing sector grew in February at its fastest pace in three months.
The Caixin/S&P Global manufacturing purchasing managers’ index rose to 50.8 from 50.1 in January, beating expectations for a reading of 50.3. A reading above 50.0 indicates expansion, while a reading below signals contraction.
Wang Zhe, senior economist at Caixin Insight, said: “Overall, the market showed clear signs of recovery, with manufacturers launching new products.
“The holiday period saw robust consumption momentum, and technological innovations in certain industries added to the positive sentiment, helping sustain the manufacturing market recovery.”
The official PMI released on Saturday by the National Bureau of Statistics rose to 50.2 in February from 49.1 the month before. The non-manufacturing PMI ticked up to 50.4 from 50.2.
Elsewhere, bitcoin shot higher after US President Donald Trump announced over the weekend the creation of a “strategic crypto reserve” that will include bitcoin and ether, among others.
Kathleen Brooks, research director at XTB, said: “Trump said he wanted to make the US the crypto capital of the world, which has sent crypto soaring at the start of this week. Bitcoin rose sharply immediately after this news; Bitcoin/ USD rose to $95,000, although it has since given back some early gains and is consolidating on Monday.”
In equity markets, BAE Systems surged to the top of the FTSE 100, with Rolls-Royce, Melrose, Qinetiq, Chemring and Babcock also sharply higher.
The sector got a lift after the UK hosted a summit on Ukraine in London, with France’s Emmanuel Macron and UK Prime Minister Keir Starmer proposing a one-month ceasefire that would cover air, sea and energy infrastructure.
Also over the weekend, Starmer announced a £1.6bn finance deal to help Ukraine buy 5,000 missiles.
Spirent Communications gained as US-based Viavi Solutions signed a deal to buy its high speed ethernet and network security business from Keysight Technologies for $410m and an additional $15m to be paid at closing.
Shell gushed higher following a Wall Street Journal report the oil giant is mulling a sale of its chemicals assets in Europe and the US.
On the downside, Bunzl lost ground after full-year results.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bae Systems Plc | +14.82% | +208.50 | 1,615.00 |
| 2 |  |
Wheaton Precious Metals Corp. | +5.84% | +300.00 | 5,440.00 |
| 3 |  |
Rolls-royce | +5.70% | +42.40 | 786.40 |
| 4 |  |
Intermediate Capital Group Plc | +1.75% | +40.00 | 2,322.00 |
| 5 |  |
Flutter Entertainment Plc | +1.70% | +370.00 | 22,150.00 |
| 6 |  |
Aib Group Plc | +1.45% | +8.00 | 558.00 |
| 7 |  |
Antofagasta Plc | +1.30% | +22.50 | 1,756.00 |
| 8 |  |
South32 Limited | +1.20% | +2.10 | 177.00 |
| 9 |  |
The Sage Group Plc | +1.15% | +14.50 | 1,279.50 |
| 10 |  |
F&c Investment Trust Plc | +1.05% | +12.00 | 1,158.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bunzl Plc | -6.77% | -228.00 | 3,140.00 |
| 2 |  |
International Consolidated Airlines Group S.a. | -3.01% | -10.60 | 341.70 |
| 3 |  |
National Grid Plc | -2.58% | -25.20 | 949.80 |
| 4 |  |
Severn Trent Plc | -2.08% | -52.00 | 2,451.00 |
| 5 |  |
United Utilities Group Plc | -1.59% | -15.60 | 964.60 |
| 6 |  |
Sse Plc | -1.47% | -22.50 | 1,505.50 |
| 7 |  |
Tesco Plc | -1.29% | -4.90 | 375.30 |
| 8 |  |
Pearson Plc | -1.14% | -15.50 | 1,346.00 |
| 9 |  |
Bt Group Plc | -1.10% | -1.75 | 158.05 |
| 10 |  |
Sainsbury (j) Plc | -1.08% | -2.80 | 255.80 |
US close: Bargain-hunting drives late rally, as stocks surge
US stocks rallied into the close on Friday despite a subdued start as investors went bargain-hunting before the month-end following a poor February performance on equity markets.
Ongoing uncertainties around potential trade tariffs and a tumultuous meeting between US president Donald Trump and Ukrainian president Volodymyr Zelensky weren’t enough to dent risk appetite in afternoon trade.
The Dow finished 1.4% higher, while the S&P 500 and Nasdaq both jumped 1.6%.
As of Thursday’s close, the S&P 500 had fallen in five of the preceding six trading sessions, losing a total of 4.6%. Even with Friday’s gain, the index has dropped 1.4% for the month.
A tense meeting between Trump and Zelensky was cut short on Friday afternoon following a heated exchange at the Oval Office. Zelensky urged Trump not to trust the words of Russian counterpart Vladimir Putin, with whom the US president said he has a close relationship with, while Trump said that Zelensky was “gambling with World War III”.
The meeting ended early without the signing of a mineral-rights deal. Trump posted on his socials that the Ukrainian premier “disrespected the United States of America”.
Economic data in focus
In economic data, US personal consumption expenditures growth eased to 2.5% on an annualised basis in January, according to the Bureau of Economic Analysis, down from 2.6% in December. At the core level, which strips out volatile food and energy, prices were also 2.6% higher year-on-year, down from December’s 2.9% increase.
The report also revealed that personal income ticked up 0.9% month-on-month, the most in a year, while personal spending was down 0.2% when compared to December, falling for the first time in almost two years.
In other news, the ISM’s Chicago Business Barometer increased for the second consecutive month, rising 6.0 points to 45.5, its highest level since September and well above the 40.6 pencilled in by analysts. However, the prices paid sub-index jumped 16.9 points – the largest monthly increase in nearly 70 years – taking the measure to its highest since August 2022.
Elsewhere on the macro front, wholesale inventories advanced 0.7% month-on-month to $905.0bn in January, according to a preliminary reading from the Census Bureau, bouncing back from December’s downwardly revised 0.4% decrease and ahead of market expectations for a softer 0.1% uptick. On an annualised basis, wholesale inventories were up 1.1%.
Market movers
Nvidia rose strongly, attempting to rebound after heavy losses the previous session after investors were underwhelmed with a strong earnings report. The revenue beat for its past quarter was the smallest in two years.
Microsoft finished higher on the same day it announced it is shutting down its voice and video-conferencing product Skype in May as it focuses on the more popular Teams offering. Meanwhile, investors were continuing to focus on comments made by president Brad Smith who on Thursday urged Trump not to go ahead with export caps on AI chips, which he says would present “a gift to China’s rapidly expanding AI sector”.
Dell Technologies and NetApp both dropped after missing revenue forecasts, while Duolingo tanked as guidance for the current quarter missed consensus estimates.
Monday newspaper round-up: leasehold system, net zero, Asda
The government must close loopholes that enable firms exploiting workers to undercut British businesses or risk the UK becoming a “dumping ground” for goods made in poor conditions, MPs have said. In a report published on Monday, the business and trade select committee calls on the government to make it mandatory for companies to say how they will tackle modern slavery in their supply chain and to introduce bigger penalties for firms that do not comply, including “naming and shaming” businesses. – Guardian
The housing minister has promised to abolish the centuries-old leasehold system in England and Wales before the end of this parliament, as the government takes the next steps towards an outright ban on new leasehold developments. Matthew Pennycook said he was committed to ending the feudal-era system – which applies to 5m homes in England – after years of complaints from leaseholders about crippling service charges and crumbling buildings. – Guardian
Britain’s net zero drive has made families poorer, according to new research that contradicts Rachel Reeves’s claim that there is no trade-off between economic growth and decarbonisation. Analysis by Peel Hunt showed a precipitous decline in electricity supply since the early 2000s coincided with much slower growth in living standards. The investment bank argued that the two were intrinsically linked. – Telegraph
Asda has told more than 10,000 senior managers that they will not receive their staff bonus this year on the back of the retailer’s poor performance. The supermarket has scrapped bonuses usually made in the first three months of the year to more senior staff as it attempts to arrest a declining market share, The Telegraph first reported. Bonuses are handed out to about 10 per cent of Asda’s employees, with about 14,000 receiving one last year. – The Times
More than $200 billion was added to the value of cryptocurrencies in the space of a few minutes after President Trump named the first five digital tokens that will make up what he has called the United States “crypto reserve”. The president said XRP, cardano (ADA) and solana (SOL) would be included in a strategic crypto reserve set up by the US government, causing prices to rocket on Sunday. The value of XRP rose from $2.23 to as high as $2.99 — leading its market capitalisation to jump by $44 billion to $173 billion in less than an hour. – The Times
