Defense Stocks Propel FTSE 100 to New Heights Amid European Military Spending Surge

Britain's FTSE 100 soared to record highs, driven by a surge in defense stocks as Europe increases military spending. The boost followed European leaders' commitment to enhance defense budgets. BAE Systems and Rolls-Royce Holdings significantly rose, but U.S. tariffs and economic growth concerns pose potential challenges.

The FTSE 100 in the United Kingdom achieved new record highs as defense stocks rallied on Monday, following European leaders' decision to boost military spending. The agreement is part of a strategy to demonstrate to U.S. President Donald Trump that Europe can independently ensure its security.

Investors showed particular interest in Britain's BAE Systems, which saw a near 14% increase, and Rolls-Royce Holdings, which rose by 5.4%. These gains mirrored similar upward trends across European defense stocks. Meanwhile, the UK's aerospace and defense index reached unprecedented levels.

Despite these gains, economic uncertainties linger due to potential U.S. tariffs and slower economic growth. The FTSE 250 midcap index remained stable, while some companies like Bunzl faced declines due to profit drops. The S&P Global PMI indicated a rapid reduction in manufacturing staff, despite rising optimism about economic recovery.

(With inputs from agencies.)