London midday: FTSE stays up as banks, defence firms gain

(Sharecast News) - London stocks were still in the black by midday on Monday in a fairly quiet session, helped along by a strong showing from banks and defence firms.

The FTSE 100 was up 0.2% at 10,470.05, with US markets set to be closed for Washington's Birthday.

Monday marked a relatively subdued start to what will be a busy week, with earnings due from miners Rio Tinto, BHP, Antofagasta, Glencore and Anglo American, while UK jobs data, inflation and retail sales figures will also be eyed.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said sentiment was steadying following last week's sharp AIdriven swings.

"It's another big week for UK investors, led by miners, with Rio Tinto expected to report a strong finish to the year after record production across iron ore, copper and lithium. Cash flow may look lighter thanks to heavy investment, but firmer commodity prices and a clearer path into 2026 should keep the focus on what comes next rather than what's gone," he said.

"Anglo American's results should look more mixed, with better iron ore offset by weaker copper and a sharply reduced dividend putting the outlook under the microscope. Shifting to the defence space, BAE Systems reports with strong momentum, a bulging order book and high hopes that rising global defence spending can keep growth ticking over into 2026."

Britzman said the closure of US markets on Monday "may be a welcome relief to many, after last week was once again dominated by violent swings linked to AI".

On home shores, a survey showed that UK consumer sentiment remained in the doldrums in February.

The S&P Global consumer sentiment index rose to 44.8 from 44.6 in January. It was the softest rate of decline in financial wellbeing for three months but remained among the weakest figures seen over the past two years as households grew increasingly concerned about debt.

Maryam Baluch, economist at S&P Global Market Intelligence, said: "A period of prolonged rain and a dearth of sunshine have no doubt not helped to lift the low spirits seen among households, but there's more going on here than just bad weather. Households are growing increasingly worried about debt in particular, especially as a rising need for credit was met with the steepest decline in availability of loans since August 2024.

"Households' appetite for major purchases was impacted by the lack of confidence and debt worries, with sentiment around big ticket expenditure slipping to the lowest in ten months. The low appetite to spend bodes ill for the broader impetus to purchase, hinting at a sustained drag on economic growth from sluggish consumer spending in the first quarter."

Figures released earlier by Rightmove showed that house price growth stalled in February after the strongest increase in over a decade the previous month, though the outlook for demand still remains bright as affordability continues to improve.

The average price of a newly listed home for sale was �368,019 in February, down �12 over the month (-0.0%) following a 2.8% surge in January.

The previous month's jump was the largest-ever increase for a January and the strongest monthly rise since June 2015, as confidence rebounded after taking a hit due to the Autumn Budget.

However, high choice of homes for sale and steadying buyer activity have kept a lid on prices this month.

Nevertheless, asking prices have still seen their strongest start to the year since 2020, even after accounting for January's standstill.

"There are still lots of homes for sale, and buying activity isn't as strong as this time last year, when many buyers were rushing to move before the stamp duty increase in England," said Rightmove's property expert Colleen Babcock.

"So in February, sellers have taken a more cautious approach by holding onto January's gains rather than pushing prices higher, at a time when competition is high and the market is still very price-sensitive."

In equity markets, NatWest was the top riser on the FTSE 100, having slumped on Friday despite reporting a better-than-expected increase in full-year profits and lifting performance targets. Banks in general were firmer, with Barclays and Lloyds also up.

Defence firms Babcock, BAE Systems, Rolls-Royce and Qinetiq gained following a report that Downing Street is considering making a significant increase in defence spending. According to the BBC, the government is mulling over the idea of meeting an existing spending target earlier than planned at a potential cost of billions of pounds.

Elsewhere, Beazley nudged lower as it said the deadline for Zurich Insurance to make a firm takeover bid has been extended. The Lloyd's of London insurer announced earlier this month that the two parties had reached an agreement in principle on the terms of an �8bn takeover by Zurich.

Housebuilders fell after the Rightmove data, with Taylor Wimpey, Berkeley and Barratt all weaker. Barratt was also knocked lower by a downgrade to 'add' from 'buy' at Peel Hunt.

Pinewood Technologies tanked after private equity firm Apax Partners withdrew its �575m offer for the automotive service provider on Friday, citing prevailing challenging market conditions.

Market Movers

FTSE 100 (UKX) 10,470.05 0.23%

FTSE 250 (MCX) 23,477.23 0.21%

techMARK (TASX) 6,068.63 0.11%

FTSE 100 - Risers

NATWEST GROUP (NWG) 606.80p 4.58%

Babcock International Group (BAB) 1,347.00p 3.70%

Melrose Industries (MRO) 664.20p 3.46%

BAE Systems (BA.) 2,023.00p 2.79%

Metlen Energy & Metals (MTLN) 36.20p 2.70%

Barclays (BARC) 464.40p 2.29%

Prudential (PRU) 1,091.50p 2.10%

easyJet (EZJ) 491.20p 2.06%

Standard Chartered (STAN) 1,748.50p 1.75%

ICG (ICG) 1,733.00p 1.70%

FTSE 100 - Fallers

Mondi (MNDI) 923.60p -3.25%

Barratt Redrow (BTRW) 378.00p -2.80%

Smurfit Westrock (DI) (SWR) 3,671.00p -2.16%

Berkeley Group Holdings (The) (BKG) 4,344.00p -2.03%

Glencore (GLEN) 484.55p -2.01%

SSE (SSE) 2,588.00p -2.01%

Rio Tinto (RIO) 7,047.00p -1.95%

British American Tobacco (BATS) 4,271.00p -1.91%

Imperial Brands (IMB) 3,234.00p -1.64%

The Sage Group (SGE) 796.40p -1.36%

FTSE 250 - Risers

Wizz Air Holdings (WIZZ) 1,410.00p 2.92%

Oxford Instruments (OXIG) 2,655.00p 2.51%

Breedon Group (BREE) 359.60p 2.39%

Trustpilot Group (TRST) 139.80p 2.34%

Chemring Group (CHG) 525.00p 2.34%

Helios Towers (HTWS) 195.80p 2.30%

Plus500 Ltd (DI) (PLUS) 4,780.00p 2.09%

Bridgepoint Group (Reg S) (BPT) 270.40p 2.04%

Princes Group (PRN) 409.50p 1.99%

Raspberry PI Holdings (RPI) 289.10p 1.94%

FTSE 250 - Fallers

Pinewood Technologies Group (PINE) 299.00p -31.50%

The Renewables Infrastructure Group Limited (TRIG) 67.20p -2.89%

Oxford Nanopore Technologies (ONT) 132.20p -2.79%

Aston Martin Lagonda Global Holdings (AML) 62.05p -1.97%

Spire Healthcare Group (SPI) 201.50p -1.71%

Ocado Group (OCDO) 220.00p -1.70%

Taylor Wimpey (TW.) 114.60p -1.63%

Softcat (SCT) 1,125.00p -1.57%

Diversified Energy Company (DI) (DEC) 964.00p -1.33%

Bellway (BWY) 2,830.00p -1.32%