FTSE 100 Gains Amid Defence Boost as BAT Shares Dip

The FTSE 100 gained 0.1% on Tuesday, bolstered by defence stocks, countering a decline in British American Tobacco shares. Defence stocks rose following German procurement news. BAT's forecast reflected U.S. market pressures. Consumer spending showed weakness, while the Bank of England and Federal Reserve considered rate cuts.

The UK's FTSE 100 index managed a 0.1% increase on Tuesday, lifted by gains in defence stocks. This helped offset a decline in shares of British American Tobacco (BAT), which dropped by 2.9% after announcing a modest growth forecast for 2026.

Defence stocks across Europe saw a boost following reports that Germany is poised to approve record procurement contracts worth 52 billion euros. BAE Systems shares rose by 2.3% and Rolls-Royce added 0.5%. Meanwhile, global investors remained cautious ahead of the Federal Reserve's policy decision, with the market largely expecting a 25 basis point rate cut.

Consumer spending in the UK showed signs of weakness. Bank of England is expected to consider a rate cut in response to economic indicators. UK consumer spending on cards fell by 1.1% in November, marking the largest drop since February 2021. Also, a British Retail Consortium survey indicated slow retail growth. In other movements, Man Group shares rose 3.5% after a rating upgrade, and Moonpig gained 3.3% with positive interim profits.