On Monday, the FTSE 100 experienced a slight decline of 0.2%, demonstrating resilience in comparison to more pronounced decreases in the US and European markets. These markets reacted negatively to renewed trade tensions, with President Trump announcing plans to increase tariffs on steel and aluminum imports. In response, China accused the US of reneging on a recent trade agreement and pledged to retaliate.
In contrast, the UK defense sector saw gains, buoyed by the government's announcement of a £15 billion initiative to expand its attack submarine fleet and enhance its nuclear deterrent capabilities under the AUKUS partnership with the US and Australia. Defense Secretary John Healey indicated that this strategic investment would send a formidable signal to Moscow. Defense companies such as Babcock saw share prices rise by as much as 3.9%, while BAE Systems, Rolls-Royce, and QinetiQ also experienced gains.
Additionally, gold mining stocks posted noteworthy performances, with Fresnillo ascending by 3% and Endeavour increasing by more than 2%, in line with a surge in gold prices. Meanwhile, UK house prices exhibited a 0.5% increase in May, surpassing predictions, and annual growth reached 3.5%, exceeding the anticipated 2.8% growth rate.
