FTSE 100 defence stocks: Rolls-Royce, BAE Systems and Babcock shares surge
Shares in FTSE 100 giants Rolls-Royce, BAE Systems and Babcock have surged off the back of the UK government unveiled its strategic defence review.
Plans to build up to 12 new nuclear-powered attack submarines have been included in the 130-page document, which concludes UK must prepare for conflict in Europe or the Atlantic and move to “war-fighting readiness” as a countermeasure to Russian aggression.
Shares in Babcock have jumped by more than seven per cent so far today to pass the 1,000p mark for the first time since the end of September 2016.
BAE Systems has also seen a rise in its share price by almost two per cent – with its stock now changing hands for 1,937p each.
The smallest rise among the London Stock Exchange’s blue chip defence giant is Rolls-Royce.
Its share price has nudged up just 0.35 per cent so far today following the defence review.
However, the rise is a continuation of the group’s remarkable run since the Covid-19 pandemic which was only interrupted by US President Donald Trump’s ‘Liberation Day’ tariffs announcement.
But Rolls-Royce’s share price fall has now been completely recovered from and the group became worth more than £70bn for the first time in its history last month.
Shares rise thanks to £15bn pledge
Shares in all three defence giants have risen by varying amounts thanks to the government’s pledge to spend £15bn upgrading the UK’s armed forces.
Other announcements include building up to 7,000 long-range weapons including missiles or drones and a £1.5bn commitment to build six new factories.
The Ministry of Defence (MoD) expects construction of the new submarines to support 30,000 jobs into the 2030s as well as 30,000 apprenticeships and 14,000 graduate roles over the next 10 years.
The review was led by the former Labour defence secretary Lord Robertson, and will make 62 recommendations in total.