BAE Systems was likely the biggest beneficiary of the news with 26% of its sales originating in the U.K
Europe stocks close slightly higher; BAE Systems up 4.7% after UK increases defense spending
European stocks edged higher on Tuesday as corporate earnings and geopolitical developments remained in focus.
The pan-European Stoxx 600 closed 0.15% higher, pulling back from earlier highs and continuing the narrow trading range seen this week.
The U.K.’s biggest defense company BAE Systems closed up 4.7% after U.K. Prime Minister Keir Starmer pledged to spend an additional £13.4 billion every year from 2027 on defense.
In a Tuesday address to parliament, he added that the government plans to raise defense spending to 2.5% of GDP by 2027, noting “the biggest sustained increase in defense spending since the end of the Cold War.”
Matt Dorset, equity analyst at Quilter Cheviot, said BAE Systems was likely the biggest beneficiary of the news with 26% of its sales originating in the U.K. He also named Qinetiq, Babcock and Chemring as names to watch.
In other corporate news, Novo Nordisk gained 3%. On Monday, American telehealth firm Hims & Hers said in its earnings call that it may stop selling compounded semaglutide — an alternative to weight-loss drugs like Novo Nordisk’s Ozempic and Wegovy.
