U.K. stocks higher at close of trade; Investing.com United Kingdom 100 up 0.76%

Investing.com -- European defense stocks surged in early trading Monday, while futures for the Euro Stoxx 50 also advanced, as regional leaders reaffirmed their support for Ukraine amid concerns over a potential U.S. policy shift.

Euro Stoxx 50 rose 0.3% as of 08:25 GMT. Major defense stocks BAE Systems (LON:BAES) and Rheinmetall (ETR:RHMG) jumped 15% and 17%, respectively, while Thales (EPA:TCFP) and SAAB AB ser. B (BS:SAABBs) surged 17% and 12%, respectively.

Dassault Aviation rose 15%, Rolls Royce (LON:RR) added over 4%, and Leonardo SpA (BIT:LDOF) leaped around 15%.

The surge comes after UK Prime Minister Keir Starmer and other European leaders met in a security summit in London to reaffirm support for Ukraine while working behind the scenes to bring Volodymyr Zelenskiy back into talks with U.S. President Donald Trump.

Over the weekend, leaders including Italy’s Giorgia Meloni and France’s Emmanuel Macron sought to repair Zelenskiy’s diplomatic clash with Washington last week. The fallout, coupled with Trump’s outreach to Vladimir Putin, accelerated efforts to bolster Europe’s defense capabilities.

Inside Lancaster House on Sunday, leaders aimed to persuade Trump to stay engaged with Europe and Ukraine ahead of his planned talks with Putin. Macron told Le Figaro that some countries were considering a one-month truce to facilitate negotiations on peacekeeping forces, though a British official said no timeline had been agreed.

The UK and France are pushing for a “coalition of the willing” to support a peacekeeping force and reassure Kyiv. European officials say they hope to present this “Europe-plus” initiative, potentially including Canada, to Trump in the coming days.

“From my discussions over recent days, we’ve agreed that the UK, France and others will work with Ukraine on a plan to stop the fighting,” Starmer said. “Then, we’ll discuss that plan with the United States.”

Vincent Juvyns, global market strategist at JPMorgan Asset Management, noted that despite recent diplomatic tensions, investors see two key trends: a possible resolution in Ukraine by 2025 and an expected increase in public defense budgets.

“One senses a large consensus for Europe to take its future in its own hands, and that more military spending is coming,” he said.

Anticipation of stronger defense outlays across Europe has fueled a rally in stocks tied to the sector.

Investing.com – U.K. stocks were higher after the close on Thursday, as gains in the Aerospace & Defense, Insurance and Mobile Telecommunications sectors led shares higher.

At the close in London, the Investing.com United Kingdom 100 rose 0.37%.

The best performers of the session on the Investing.com United Kingdom 100 were Rolls-Royce Holdings PLC (LON:RR), which rose 15.94% or 100.60 points to trade at 731.60 at the close. Meanwhile, London Stock Exchange Group PLC (LON:LSEG) added 6.08% or 675.00 points to end at 11,775.00 and Hiscox Ltd (LON:HSX) was up 4.47% or 50.00 points to 1,169.00 in late trade.

The worst performers of the session were WPP PLC (LON:WPP), which fell 16.23% or 125.00 points to trade at 645.20 at the close. Howden Joinery Group Plc (LON:HWDN) declined 6.14% or 51.50 points to end at 787.50 and Vistry Group PLC (LON:VTYV) was down 3.77% or 23.50 points to 600.00.

Falling stocks outnumbered advancing ones on the London Stock Exchange by 1086 to 658 and 646 ended unchanged.

Shares in Rolls-Royce Holdings PLC (LON:RR) rose to 5-year highs; up 15.94% or 100.60 to 731.60. Shares in WPP PLC (LON:WPP) fell to 3-years lows; down 16.23% or 125.00 to 645.20.

Gold Futures for April delivery was down 1.40% or 40.99 to $2,889.61 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in April rose 2.22% or 1.52 to hit $70.14 a barrel, while the May Brent oil contract rose 1.85% or 1.33 to trade at $73.40 a barrel.

GBP/USD was down 0.44% to 1.26, while EUR/GBP unchanged 0.22% to 0.83.

The US Dollar Index Futures was up 0.73% at 107.11.

Investing.com - European markets closed mostly lower on Thursday after U.S. President Donald Trump vowed to impose 25% tariffs on imports from the European Union.

The pan-European Stoxx 600 dipped by 0.5%, while Germany’s DAX fell 1.2% and France’s CAC 40 slipped 0.5%. The U.K.’s FTSE 100 gained 0.3%.

On Wednesday, Trump floated that he could soon enact a 25% "reciprocal" tariff on cars and other goods coming from the European Union. A spokesperson for the European Commission said the EU will respond "firmly and immediately against unjustified barriers to free and fair trade," Reuters reported.

Trump also appeared to indicate that postponed 25% import tariffs on Canada and Mexico could be delayed by roughly another month, saying the levies would come into effect on April 2.

"I have to tell you that, you know, on April 2, I was going to do it on April 1," Trump said. "But I’m a little bit superstitious, I made it April 2, the tariffs go on. Not all of them but a lot of them."

However, a White House official later said that Trump’s prior deadline of March 4 was still in effect "as of this moment," with a review of actions taken by Canada and Mexico to boost border security pending.

Amid the trade tensions, investors are also watching key economic data releases, including Spain’s inflation rate, Italy’s business and consumer confidence figures, and eurozone economic sentiment indicators, which could provide further insights into the region’s economic health.

Rolls-Royce surges past expectations with strong earnings

Rolls-Royce Holdings (LON:RR) raised its medium-term targets, as a drive to improve its engines and slash costs buoyed its results above market expectations.

The company is now projecting 2025 operating profit and free cash flow above market consensus, putting it on track to achieve key financial targets ahead of schedule, according to Morgan Stanley analysts. Shares in Rolls-Royce

Meanwhile, Italian energy giant Eni SpA’s (BIT:ENI) fourth-quarter earnings missed market expectations, with adjusted earnings before interest and taxes at 1.69 billion euros and net income at 892 million euros, both below consensus estimates.

Crude oil prices recover after Trump reverses Chevron’s Venezuela license

Oil prices edged higher on Thursday, bouncing back after two consecutive sessions of declines. The rebound came after Trump announced a reversal of the license previously granted to Chevron (NYSE:CVX) to operate in Venezuela, reigniting supply concerns.

(Scott Kanowsky and Sam Boughedda contributed reporting.)

Investing.com -- Rolls-Royce (LON:RR) on Thursday has upgraded its financial forecasts after reporting a stronger-than-expected results for 2024, with analysts at Morgan Stanley noting that the British engineering giant is on track to achieve key financial targets ahead of schedule.

The aerospace and defense company reported a 16% year-on-year increase in revenue, reaching £17.8 billion, outperforming consensus estimates by 3%.

Civil Aerospace emerged as the primary driver, with a 23% surge in revenue, while the Defence and Power Systems divisions also posted modest gains.

Operating profit climbed to £2.5 billion, marking an 8% beat on expectations, and free cash flow soared to £2.4 billion, surpassing forecasts by 9%.

Morgan Stanley analysts described the results as "very strong," emphasizing that Rolls-Royce has exceeded projections and is accelerating the timeline for meeting previously set financial goals.

The company’s guidance for 2025 is ahead of market expectations, with projected operating profit and free cash flow in the range of £2.7 billion to £2.9 billion—8% above consensus estimates.

The positive momentum suggests Rolls-Royce is poised to achieve its 2027 targets two years ahead of schedule.

Rolls-Royce has raised its financial targets, projecting free cash flow of £4.3-4.5 billion by 2028, a 20% jump from prior estimates.

This improvement, fueled by enhanced margins and operational efficiencies, is expected to result in Rolls-Royce generating more free cash than Safran (EPA:SAF), despite a smaller market value, according to Morgan Stanley.

Rolls-Royce will execute a £1 billion share buyback in 2025, indicating management's confidence. Morgan Stanley sees potential for an expanded buyback if performance remains strong

While the results largely reflect a strong turnaround, Morgan Stanley noted minor concerns regarding flat spare parts sales in the Civil Aerospace segment.

However, the broader outlook remains overwhelmingly positive, with Rolls-Royce benefiting from increased demand for aircraft engine maintenance and efficiency gains in its long-term service agreements.

Investing.com -- Rolls-Royce (LON:RR) on Thursday has upgraded its financial forecasts after reporting a stronger-than-expected results for 2024, with analysts at Morgan Stanley noting that the British engineering giant is on track to achieve key financial targets ahead of schedule.

The aerospace and defense company reported a 16% year-on-year increase in revenue, reaching £17.8 billion, outperforming consensus estimates by 3%.

Civil Aerospace emerged as the primary driver, with a 23% surge in revenue, while the Defence and Power Systems divisions also posted modest gains.

Operating profit climbed to £2.5 billion, marking an 8% beat on expectations, and free cash flow soared to £2.4 billion, surpassing forecasts by 9%.

Morgan Stanley analysts described the results as "very strong," emphasizing that Rolls-Royce has exceeded projections and is accelerating the timeline for meeting previously set financial goals.

The company’s guidance for 2025 is ahead of market expectations, with projected operating profit and free cash flow in the range of £2.7 billion to £2.9 billion—8% above consensus estimates.

The positive momentum suggests Rolls-Royce is poised to achieve its 2027 targets two years ahead of schedule.

Rolls-Royce has raised its financial targets, projecting free cash flow of £4.3-4.5 billion by 2028, a 20% jump from prior estimates.

This improvement, fueled by enhanced margins and operational efficiencies, is expected to result in Rolls-Royce generating more free cash than Safran (EPA:SAF), despite a smaller market value, according to Morgan Stanley.

Rolls-Royce will execute a £1 billion share buyback in 2025, indicating management's confidence. Morgan Stanley sees potential for an expanded buyback if performance remains strong

While the results largely reflect a strong turnaround, Morgan Stanley noted minor concerns regarding flat spare parts sales in the Civil Aerospace segment.

However, the broader outlook remains overwhelmingly positive, with Rolls-Royce benefiting from increased demand for aircraft engine maintenance and efficiency gains in its long-term service agreements.

Investing.com -- Britain's Prime Minister Keir Starmer announced plans to hike defense spending to 3% of GDP in the next parliament, set to begin in 2029, with part of the funding coming from cuts to the aid budget.

He committed to reach 2.5% of GDP in defense spending by 2027, citing growing security concerns in Europe.

UK-based defense stocks jumped Tuesday, with BAE Systems (LON:BAES) jumping more than 4% by 14:45 GMT, and Babcock International (LON:BAB) climbing 1.9%. Moreover, shares in Qinetiq Group PLC (LON:QQ) also added 1.9% and Rolls-Royce (OTC:RYCEY) Holdings PLC (LON:RR) rose 2%.

The UK currently allocates 2.3% of GDP to defense, and while the previous government had set a 2.5% target, no timeline had been specified.

Starmer told lawmakers that the planned increase would add £13.4 billion ($17 billion) annually to defense spending. To help cover the cost, he confirmed that overseas development aid would be reduced from 0.5% to 0.3% of national income.

Starmer called the move the “biggest sustained increase in defense spending since the end of the Cold War,” arguing that it is necessary because “tyrants like (Russian President Vladimir) Putin only respond to strength.”

Citi analysts see two main potential implications of this move. First, the UK defense spending could rise by 4% in the long term, increasing from 2.5% to 2.6% of GDP. "We’d broadly suggest this increases the value of UK defense sales by the same," analysts said.

Second, in the medium term, by 2027, they anticipate an 8% increase, potentially driving a comparable rise in UK defense sales, though they'd focus on the long-term fundamental value.

Stramer's announcement comes as European nations rush to strengthen their defenses amid uncertainty over US foreign policy under President Donald Trump, who has previously questioned NATO’s value and criticized European countries for not contributing enough to their own security.

Starmer, who is set to meet Trump at the White House on Thursday, has proposed deploying British troops to Ukraine to help maintain a ceasefire but emphasized that an American “backstop” would be crucial to ensuring lasting stability.

“We must stand by Ukraine, because if we do not achieve a lasting peace, then the economic instability and threats to our security, they will only grow,” Starmer said.

“And so as the nature of that conflict changes, as it has in recent weeks, it brings our response into sharper focus, a new era that we must meet as we have so often in the past, together, and with strength.”