FTSE 100 Live 28 February: Sanctions trigger Russia financial markets turmoil, BP dumps Rosneft stake

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Investors pile into BAE, Chemring and Darktrace

Germany’s historic pledge to massively boost military spending triggered a fresh wave of buying of defense stocks today, with shares in BAE Systems as much as 14% higher.

BAE hit at a record 749p in the FTSE 100 index and is up by 25% over the past week as analysts at JP Morgan Cazenove said the Ukraine invasion had “fundamentally changed” the outlook for European defense stocks.

Other risers in London included MoD supplier Qinetiq and defense countermeasures firm Chemring after gains of 10% in the FTSE 250 index. Avon Protection, which provides military headgear, added 8%.

In Germany, shares in sensors firm Hensoldt jumped by as much as 84% ​​after Chancellor Olaf Scholz announced an injection of 100 billion euros to modernise armed forces.

By 2024, Germany said it will spend at least 2% of gross domestic product each year on defense, while it also reversed a ban on weapons exports to conflict zones.

Jefferies said defense was now “top of mind” for all European investors, reversing a long period of pressure on budgets. Cyber ​​security firms also attracted significant buying, with Darktrace shares up 8% in the FTSE 250 index.

Away from the Ukraine conflict, investors noted the safe haven appeal of outsourcing business Bunzl after its shares rose 6% on the back of annual results today.

The FTSE 100-listed company, which provides day-to-day essential supplies for supermarkets, hospitals and restaurants, reported earnings ahead of expectations while it also boosted its outlook for 2022 trading.

Shares rose 6% or 168p to 2928p, which is the highest level this year. Other defensive stocks in demand included National Grid and Rentokil Initial after gains of 2%.

The FTSE 100 index fell 89.93 points to 7399.53, with airline stocks under pressure after most of Europe closed its airspace to carriers from Russia and Moscow retaliated with measures of its own.

Shares in British Airways owner IAG fell as much as 6% before settingtling 5.2p lower at 149.3p, not helped by a systems outage causing more than 150 short-haul flights to be canceled over the weekend.

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