Defence stocks lift FTSE 100, Assura jumps

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FTSE 100 up 0.2%, FTSE 250 up 0.2%

Assura rejects $2 billion proposal, shares climb

Defence stocks jump on pressure to boost military spending

Feb 17 (Reuters) – Britain’s benchmark index edged up on Monday, supported by aerospace and defence stocks due to rising U.S. pressure on Europe to ramp up defence spending, while Assura hit a more than one year high after it rejected a $2 billion takeover proposal.

The blue-chip FTSE 100 added 0.2% at 1037 GMT, after it fell 0.4% on Friday. The midcap FTSE 250 rose 0.2%.

Defence company BAE Systems jumped 6.6% to the top of the blue-chip index, riding the coattails of rising defence stocks across Europe.

The UK’s aerospace and defence index led the sectoral gains, rising 3.4%.

French President Emmanuel Macron will host European leaders, including Britain’s prime minister Keir Starmer, on Monday for an emergency summit on the Ukraine war.

Ahead of the Paris talks to discuss Europe’s role in a ceasefire, Starmer said he was ready to put peacekeeping troops in Ukraine.

Further adding to gains, shares of banks including NatWest and Barclays gained more than 3%.

Meanwhile, Bank of England Governor Andrew Bailey said in an interview that inflation was slowing and an expected pick-up in price growth later this year was unlikely to embed longer-term inflation pressures in the economy.

The central bank reduced its benchmark bank rate to 4.5% from 4.75% on February 6 but said it would move gradually and carefully when considering further changes to borrowing costs.

Meanwhile, a run-up in asking prices for newly-listed homes in Britain has lost steam ahead of an increase in property purchase taxes.

Investors were also looking ahead to this week’s key data releases, including inflation figures and retail sales numbers for January.

Among individual stocks, Assura jumped 15.3% after the British healthcare property developer rejected a 1.56-billion-pound ($2 billion) proposal from KKR and pension fund Universities Superannuation Scheme.

Shares in John Wood Group fell 17.2% to a fresh record low, extending their fall from the previous session when the engineering firm tumbled 55% after forecasting negative cash flow for another year.

(Reporting by Nikhil Sharma; Editing by Mrigank Dhaniwala)