BAE Systems fired up by Ukraine war escalation
Defence giant BAE Systems was one of the biggest risers as Vladimir Putin’s latest escalation of military tensions in Ukraine sparked predictions of more military spending.
The FTSE 100 firm jumped 4.3pc, or 33.2p, to 805p after Russia announced plans to mobilise army reservists to support the invasion following a rapid advance of Ukrainian forces that has left the Kremlin on the back foot.
Around 300,000 soldiers are expected to be called up initially, a fraction of what is thought to be a total of 2m. Putin also plans referendums to annex Ukrainian territories, which, alongside a veiled threat to use nuclear weapons, rattled global investors.
‘There are growing expectations that there will be heightened demand for military hardware to counter Russia’s aggression, with nato member countries having already pledged significant increases in spending on defence,’ said Hargreaves Lansdown analyst Susannah Streeter. even so, London’s blue-chip index managed to eke out a gain and was up 0.63pc, or 44.98 points, to 7237.64 while the FTSE 250 added 1.01pc, or 186.53 points, to 18,714.67.
The footsie was supported by the oil giants, which rose on talk the price of Brent crude could rocket over fears the energy crisis will escalate.
Shell added 1.4pc, or 32.5p, to 2335p while BP climbed 0.7pc, or 3.05p, to 455.5p and north Seafocused Harbour Energy rose 2.4pc, or 11.1p, to 482p.
But Moscow’s rhetoric weighed on travel stocks. British Airways owner IAG dropped 3.3pc, or 3.54p, to 104.8p, Easyjet fell 3.3pc, or 11.7p, to 340.9p, Wizz Air slipped 4.1pc, or 83.5p, to 1962.5p, Tui lost 3.4pc, or 4.65p, to 134.2p and Jet2 sank by 3.2pc, or 27.6p, to 843.4p.
Meanwhile, blue-chip firms that earn a large part of their money in overseas currency were boosted by a weakening pound, which dropped to its lowest level against the US dollar since 1985.
Miners benefited, with Glencore climbing 1.1pc, or 5.1p, to 486p, Fresnillo rising 0.9pc, or 6.6p, to 747.4p, Anglo American adding 1.3pc, or 36.5p, to 2814.5p and Rio Tinto up 0.5pc, or 24p, to 4720p.
Housebuilders were also up after reports the chancellor will cut stamp duty in friday’s ‘mini budget’ to boost growth. Shares in Persimmon surged 4.7pc, or 63p, to 1400p while Barratt climbed 3.5pc, or 14.1p, to 418.9p, Taylor Wimpey added 3.8pc, or 3.9p, to 106.95p and Berkeley edged up 1.4pc, or 48p, to 3555p.
There was more good news for pharma giant AstraZeneca after EU regulators backed one of its asthma drugs. It rose 0.1pc, or 14p, to 10,090p. computer game maker Frontier Developments surged 7.7pc, or 92p, to 1284p after it reported revenues of £114m for the year to May 31, up 26pc on 2021, thanks to strong performances from its new releases including dinosaur theme park simulator Jurassic World evolution 2. Profits were down at £1.5m from £19.9m due to a one-off charge.
Meanwhile, Keywords Studios, which provides support services to the gaming industry, snapped up Vancouver studio Smoking Gun Interactive in a £26m deal as it reported a pre-tax profit of £34m for the first half, up 78pc year-on-year amid high demand. It fell 1.6pc, or 38p, to 2312p.
Games Workshop, the maker of Warhammer battle figures, fell 9.4pc, or 660p, to 6400p after reporting, for the three months to August 28, pre-tax profit of £39m, down from £45m a year ago. Sales rose to £106m from £98m.
And property investor LXI rose 1.9pc, or 2.6p, to 141p. It is in talks to buy 18 stores from Sainsbury’s (up 0.3pc or 0.6p, to 194.8p) in a deal worth up to £500m.