- FTSE 100 rises almost 62 points to 8,871.3
- BAE Systems, Qinetiq and other sector mates lead charge after Ukraine defence summit
- UK manufacturing PMI sinks to 14-month low
- Bitcoin recovers from slump as Trump confirms crypto reserve
4.45pm: A day for defence
The FTSE 100 smashed a new all-time high of 8,908.8 and set a new record closing high of 8,871.3 as March trading began on Monday.
BAE Systems shot up another 15%, taking gains to around 30% over the past four weeks, as defence was the sector of the day around Europe following the Ukraine-focused security summit in the UK over the weekend.
Around the FTSE 350, QinetiQ, Senior, Chemring, Babcock, Rolls-Royce and Melrose were also in the green.
Miners were also among the risers, including Antofagasta, Endeavour, Rio Tinto and Glencore.
Fallers were led by Bunzl as its results and guidance were both slightly short of expectations.
Utilities and other bond-like stocks, including Severn Trent, BT, National Grid and United Utilities were down as bond yields rose. Banks and housebuilders were also in the red.
European stocks put London in the shade, however, with Germany's DAC storming up 2.6% and France's CAC 1.1%, with defence and aerospace names in the lead, including Rheinmetall, Thales and Airbus.
Meanwhile, after surging overnight after Donald Trump's strategic reserve announcement, bitcoin and other crypto are back in the red.
3pm: $500K price for bitcoin?
President Trump's announcement that he had instructed his crypto working group to move forward on establishing a Crypto Strategic Reserve has led Standard Chartered's chief digital asset analyst to reiterate his $500,000 target for bitcoin.
Geoff Kendrick says he has a $200,000 bitcoin price target for the end of 2025.
"Thereafter, we expect Bitcoin to reach $300,000 by the end of 2026, $400,000 by the end of 2027, and $500,000 by the end of 2028, where it will likely remain until the end of 2029," he says.
With Trump's announcement coming ahead of Friday’s Crypto Summit at the White House, Kendrick said markets are expecting some other policy announcements to emerge this week.
2.50pm: Gold lining
Gold prices have been strong as investors flocked to safe-haven assets amid rising geopolitical and trade tensions.
Spot gold jumped 0.7% to $2,878.25 per ounce by midday, reversing last week’s losses. It had been up 1.3% earlier in a busy session.
Analysts pointed to renewed fears over US tariffs and potential retaliation from key trade partners.
1.12pm: US stocks heading higher
US stock indexes are tipped to head higher, led by the tech-powered Nasdaq.
S&P 500 futures are pointing to a 0.5% rise, with Nasdaq 100 futures rising 0.7% and those for the Dow Jones up 0.35%.
While sentiment on the Street improved sharply on Friday and looked solid ahead of the first session of the week, market analyst Susannah Streeter at Hargreaves Lansdown said concerns about an increasingly sluggish US economy, the impact of tariffs on inflation and falling consumer confidence "may well come back to bite".
"At the moment, there appears hope that there could be another delay to tariffs on US neighbours, but Trump seems determined to punish them for various ‘unfair’ transgressions, so any last-minute reprieve looks likely to be temporary."
12.40pm: UK TikTok probe
The UK’s Information Commissioner’s Office (ICO) has launched a major investigation into TikTok’s handling of teenagers’ personal data.
The probe will examine how the platform uses information from users aged 13 to 17 to recommend content and whether this could lead to harm, such as excessive screen time or data leaks.
TikTok maintains that it has strict privacy protections for young users.
The ICO is also investigating Reddit and Imgur over their age verification measures to ensure compliance with UK data protection laws.
12.06pm: Defence stocks lead the way across Europe
The FTSE 100 has continued to climb higher as the morning went on, up 0.7% now, slightly lagging the strongest gains across in the continent, with Germany's DAX and France's CAC, advancing 1.2% and 0.9% respectively.
Defence stocks are leading the way, with Rheinmetall topping the risers in Frankfurt, Dassault in Paris, BAE in London and Kongsberg in Oslo.
Citi analysts say: "there is a clear view in Europe that a peace negotiated bilaterally between Russia-US, would be unlikely to hold and risks a repeat of the failed Minsk agreements.
"Ultimately, if Europe is to position Ukraine for a 'just and lasting' peace, it will need to provide significant military capability. Military restocking and recapitalization of the industrial base increasingly looks like a pan-European fiscal priority."
Also noted is that the Sunday Times yesterday reported that Chancellor Rachel Reeves has adjusted the remit of the £27.8 billion National Wealth Fund so it can be spent on defense.
As the fund was set up to back and encourage private investment in infrastructure projects, it will "probably not directly give more sales to UK industry, but indirectly by increasing the capacity to allow more procurement to be spent within the UK, as well as reducing the private capex spend required to increase capacity."
11.50am: Dovish EU inflation data
Ahead of the European Central Bank meeting this week, today's inflation reading earlier was a "dovish sign", says ING.
Headline inflation fell from 2.5 to 2.4% and core inflation dropped from 2.7 to 2.6%.
"The weak economic environment seems to trump an increase in reported input costs for the moment. For the ECB, this is a dovish sign as the governing council mulls over how low it should bring rates," says ING economist Bert Colijn.
He notes that core inflation ticked down after having been stable at 2.7% since September, which "proves challenging given weak domestic demand".
"Consumers have regained purchasing power, but remain worried about the general economic situation, which has contributed to a higher savings rate.
"Over the course of the year, we expect the eurozone to slowly move away from stagnation as domestic demand strengthens a bit on the back of further purchasing power improvements and lower rates. That should make for an environment in which inflation remains somewhat above 2%. But then again, geopolitical developments are making the inflation outlook highly uncertain at the moment. Think, for example, of uncertainty surrounding a trade war and energy prices.
"For the European Central Bank, the big question is how low it will go. Concerns among hawks in the governing council about lowering rates too much have made headlines in recent weeks. Today’s soft inflation reading will contribute to views that inflation is now fairly benign, but will not provide firm evidence on how low rates should be set. We expect another 0.25ppt cut later this week to be accompanied by a fiercer debate on when the ECB will reach its terminal rate."
11.24am: UK data mixed, say economists
Economists say the UK data earlier on the manufacturing survey shines a spotlight on the dilemma facing the Bank of England.
"In an echo of the challenges facing the wider economy, the manufacturing sector reported a significant reduction in headcount alongside building price pressures," says Matt Swannell, chief economic advisor to the EY ITEM Club.
"As the recent rise in manufacturing input price pressures feeds through to final prices, we expect core goods inflation to rise in the coming months. However, we expect the Bank of England to lower interest rates gradually as it balances the risk of weakening demand and sticky inflation."
He says recent S&P Global surveys have "proved an unreliable guide to official estimates of manufacturing activity", being influenced by business sentiment rather than true shifts in activity.
"Even so, 2025 will probably be another unspectacular year for the manufacturing sector as interest rates will remain high, fiscal policy will stay tight and uncertainty around tariffs will linger."
As for the Bank of England mortgages data, Rob Wood at Pantheon Macroeconomics says the strong credit card borrowing and solid housing market activity "signal a consumer rebound in early 2025".
Admittedly, he notes that households squirrelled away more of their rising income in bank accounts in January but have shifted their bank deposits into more liquid, easily spent forms, "suggesting they are gearing up to spend", with consumer credit flows rebounding strongly in January too, with net credit card borrowing of £1.1 billion, the strongest flow since November 2023.
Households can keep raising spending, he adds, pointing to the ONS Opinions and Lifestyle Survey reports that only 23% of consumers say they could not afford an unexpected expense of £850, the lowest proportion since the survey started in 2021.
"Regardless of the stock of real liquid assets relative to an arbitrary trend, consumers say they have rebuilt their precautionary savings."
The rush to beat changes to stamp duty in April, which supported net new mortgage approvals for house purchase in January, "seems to have peaked, so approvals will likely slow in the next few months".
11.09am: JPMorgan reinforces defence thesis
Solidifying the gains for European defence stocks was a note from JPMorgan this morning, entitled "Europe’s rearmament cycle...now it’s for real".
The US investment bank raised its share price targets by an average 25%, including Babcock International, BAE Systems, Qinetiq and Rolls-Royce.
European names getting a hike included Dassault Aviation, Leonardo and Thales.
In March last year, a report from JPM argued that the rearmament cycle would last for at least a decade as the continent "needed to address 30 years of underinvestment in defence" and predicting the US might be less willing to subsidise Europe’s defence.
"In our view, the events of the last two weeks have turbo-charged this thesis," the analysts said, including Denmark and the UK both announcing significant increases in their defence budgets and Germany’s new Chancellor has proposing a new €200 billion special defence fund for Germany alone.
With 30 European countries in NATO, the analysts expect many of them will soon commit to much higher defence spending, also leading the European defence sector to "further re-rate as investors underwrite strong growth and visibility".
10.42am: Leasehold system to end
The government has published a white paper today that it says is the "beginning of the end" for the leasehold system, with a move to back commonhold ownership.
New leasehold flats will be banned, with commonhold becoming the default tenure for homes.
Under leasehold ownership, third parties own the land or buildings and make decisions on behalf of homeowners.
The government says it will implement reforms to help people who own leashold properties and are "suffering from unfair and unreasonable practices".
Housing and planning minister Matthew Pennycook says the government will "do what is necessary to bring the feudal leasehold system to an end", by reinvigorating commonhold to "ensure that it is homeowners, not third-party landlords, who will own the buildings they live in and have a greater say in how their home is managed and the bills they pay".
10.14am: EU inflation eases less than expected
Eurozone inflation dipped to 2.4% on an annual basis last month, down from 2.5% in January, but not as much as economists expected, with a consensus forecast of 2.3%.
Core CPI inflation, excluding more volatile prices like for food and fuel, dipped to 2.6% from 2.7% in January, again not as much as expected.
Earlier too, the eurozone manufacturing PMI came out, showing a 47.6 a bit stronger than the preliminary reading of 47.3.
9.57am: Manufacturing PMI at 14-month low
Correction, or clarification maybe. The manufacturing PMI fell to a 14-month low of 46.9 in February, which was above the earlier flash estimate of 46.4 but down from January's 48.3 PMI reading.
The February PMI data show UK manufacturers "facing an increasingly difficult trading environment", says Rob Dobson, director at S&P Global Market Intelligence.
"Weak demand, low client confidence and rising cost pressures are accelerating the downturns in output and new orders, while the Autumn Budget's changes to the national minimum wage and employer NICs are driving up inflation fears and intensifying the downward trend in staff headcounts."
He says the pace of manufacturing job losses is currently running at a rate not seen since the pandemic months of mid-2020.
"Cost and demand considerations also encouraged cutbacks to purchasing activity and stocks, as the tough economic backdrop placed manufacturers on an increasingly defensive footing."
Inflation worries are flagged too, as input costs rose at the fastest pace for over two years, which Dobson says is because suppliers are front loading expected increases in their own wages and NIC costs, with factory gate selling price inflation hitting a 22-month high.
"This combination of absent growth and rising prices will contribute to a growing dilemma for the Bank of England over the coming months," he says.
9.44am: Manufacturing PMI and BoE lending both stronger than expected
Borrowing data from the Bank of England and the UK manufacturing purchasing managers' index have both just come out.
The manufacturing PMI for February improved slightly to 46.9 (anything below 50 represents contraction) from 46.4 the previous month and slightly higher than the 46.4 consensus forecast.
"Ongoing concerns about weak demand and rising cost pressures led to deeper downturns in output, new orders and employment", the survey compiler S&P Global said.
Meanwhile, the BoE revealed data on lending at the start of the year, with mortgage approvals roughly unchanged month on month, while consumer credit increased.
Mortgage approvals in January came to 66.2K, down from 66.5K at the end of last year but higher than the 65.5K that economists expected.
This meant net borrowing of mortgage debt by individuals rose by £0.9 billion to £4.2 billion in January.
Net consumer credit borrowed by individuals was £1.7 billion in January, up from £1.1 billion the prior month. Credit card debt increased to £1.1 billion from £0.4 billion, and was the highest increase since November 2023.
9.22am: Severe share price moves
A big faller down the ranks is Severfield PLC (LSE:SFR), plunging 41% after the structural steel group warned that tough market conditions in the UK and Europe had hit profits.
The company formerly known as Severfield-Reeve and Severfield-Rowen, said pricing pressures had lasted longer than expected, while project cancellations and delays has reduced its workload, including a major contract pushed into next year.
Despite efforts to offset these challenges through cost-cutting and securing new contracts, the provider of the steel for the London's 2012 Olympic Stadium, The Shard and Wimbledon Centre Court roof now expects annual pre-tax profit to come in significantly below previous estimates.
Elsewhere, Argo Blockchain PLC has jumped 19% after signing a term sheet for $40 million in financing to refresh its Quebec bitcoin mining fleet.
And in the traditional mining sector, a heavyweight team of mining veterans including ex-Anglo American boss Mark Cutifani and ex-Glencore and Xstrata boss Mick Davis are among backers for a potential $23 million investment in Zanaga Iron Ore Co Ltd (AIM:ZIOC).
Their involvement signals renewed momentum for the Zanaga iron ore project in the Republic of Congo, which has struggled to move beyond the planning stage, and a large chunk of the money will be used to buy out Glencore’s 43% stake.
An issue price of US$0.0516 per share (approximately 4.10p) at a discount to the last close, means the shares are down 13% this morning.
And well followed small cap Helium One Global Ltd (AIM:HE1, OTCQB:HLOGF) is up 19% after it revealed that it has received an offer letter from the Mining Commission in Tanzania, for a mining licence covering its southern Rukwa helium project.
8.56am: Bunzl bumps to low
Biggest faller on the Footsie is Bunzl PLC, which is down 6.7% to around a seven-month low, as its final results were slightly weaker than expected, though with a £200 million share buyback and a 32nd consecutive annual dividend increase.
The distributor of non-food consumables, such as food packaging, disposable cups, gloves and sanitary equipment had issued a profit warning in December when it said profitability was being hit by "more persistent" deflation than it had previously anticipated.
Today, the FTSE 100-listed group said underlying trends were improving in the second half of the year, "driven by slight volume growth and a small easing of deflation".
On the outlook, guidance was reiterated for 2025 for "robust growth" in revenue and flat margins.
8.36am: Small cap defence names also included
Small-cap defence stocks are also being lifted after the European defence summit.
Helmet and gas mask maker Avon Technologies PLC (LSE:AVON) has leapt 6.5%, which has been topped by sonar, torpedo and communications specialist Cohort PLC (AIM:CHRT) shooting 11.5% higher.
Avon is being boosted by a further order for 'next generation' helmets from the US Army worth US$17.6 million.
Others in the sector are down for some reason, namely Senior PLC (LSE:SNR) and Velocity Composites Ltd (AIM:VEL).
Richard Hunter, head of markets at Interactive Investor, says: "With neither particular exposure to the mega cap tech risks nor indeed, at least for the moment, to tariff threats, the UK has ploughed ahead, with the premier index increasingly garnering investor attention given its perceived defensive qualities.
"Having finished February at a record closing high, March has also started on a sprightly footing, with the FTSE100 making further progress in early trade."
He notes that the index has now gained 8.2% in the year to date, quite apart from its more traditional attraction of a healthy average dividend which currently stands at 3.5%, boosting investors’ total returns.
"The index further turned defence into attack as wider geopolitical concerns again lit a fire under the likes of BAE Systems and Rolls-Royce".
BAE, which is also gaining additional momentum from a broker upgrade, has hit a new all-time high just above 1,650p.
8.12am: FTSE notches new all-time high as defence stocks surge
The FTSE 100 has started positively, notching a new all-time high in the process.
It's up 32 points or 0.4% at 8,841.6.
BAE Systems PLC (LSE:BA.), which seems to be the touchstone for increased UK and European defence spending, is up 15% after the Ukraine defence summit hosted by Kier Starmer over the weekend.
Other defence-adjacent stocks are also on the up, with Rolls-Royce Holdings PLC (LSE:RR.) rising 5%, continuing its results momentum from last week, Melrose Industries PLC (LSE:MRO, OTC:MLSPF) rising 1.1%.
And on the FTSE 250, defence technology grop QinetiQ Group PLC (LSE:QQ.) has jumped 9.5%, Babcock International PLC (LSE:BAB) 7.6% and Chemring Group (LSE:CHG) 6%.
Securing our future.
Today Prime Minister @Keir_Starmer welcomed international leaders to London for a summit on driving forward a just and lasting peace for Ukraine. pic.twitter.com/3pF7X5uNjv
— UK Prime Minister (@10DowningStreet) March 2, 2025
7.58am: Glimmers of hope in business survey
UK business activity continued to be hit by weak consumer spending in the past three months but "glimmers of hope" emerged, the latest CBI survey says.
Private sector activity fell in the past three months and at a faster rate than in the three months to January, according to the new Growth Indicator report, with a growth index is -27% from -23% a month earlier.
Business volumes fell across all sectors, the report found.
"There are some glimmers of hope," reassures CBI deputy chief economist Alpesh Paleja. "Growth expectations have become marginally less negative, driven by a predicted return to growth in the manufacturing sector.
"But overall, the data still paints a picture of a tough operating environment for businesses, with consumer-facing sectors faring particularly badly."
7.36am: US crypto reserve sparks bitcoin rebound
Bitcoin, having been limping along at $86k over the weekend, after a 15% fall in the second half of last month, began to charge higher on Sunday.
This big move was triggered after President Trump announced an executive order to create a Crypto Strategic Reserve.
Announcing the order on his Truth Social social media platform, Trump said the Executive Order on Digital Assets directed the Presidential Working Group will "move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA" as well as bitcoin and ethereum.
Trump said he wanted to "make sure the US is the crypto capital of the world".
Market analyst Kathleen Brooks at XTB said: "We expect a broad-based recovery in crypto, with the $100,000 level an obvious target for bitcoin.
"There has been a surge in activity in the options market, with a number of bullish bets being placed on further gains for crypto, now that President Trump has shown his loyalty to the currency."
She said bitcoin had "traded like a tech stock" since it peaked in mid-January and with it returning to recovery mode she wondered if it can "drag the Nasdaq higher with it" after the Magnificent 7 group of mega-cap tech stocks had fallen to its lowest level since November late last week.
"Ironically, a currency that was designed to be isolated from government interference and decentralized, is now reliant on the US government for its fortunes," she added.
7.23am: February summed up for markets
A review of the past month from Deutsche Bank.
February was "an incredibly eventful month for markets, with most assets making steady gains, despite the threat of US tariffs", writes macro strategist Henry Allen.
"Initially, the tariff threat meant markets got the month off to a difficult start, but a last-minute extension for Canada and Mexico led to a subsequent relief rally. So at first, that helped risk assets to do quite well, with the S&P 500 reaching an all-time high on February 19.
"But towards month-end, a more risk-off tone developed as tariffs came back on the agenda, alongside some weaker data out of the US.
"That hit the Magnificent 7 in particular, which posted their worst month since December 2022, which in turn dragged down US equities more broadly."
On the plus side, European equities continued their outperformance, while demand for 'safe haven' assets meant sovereign bonds and gold advanced.
Sovereign bonds were among the assets that saw the biggest gains in February, with US Treasuries doing "particularly well" given the risk-off tone towards month end.
The US 10yr yield fell 33bps on the month to 4.21%, which Allen noted was the biggest monthly decline in yields since July 2024, while in Europe, 10yr German bund yields also came down 5bps to 2.41%.
The start of negotiations between the US and Russia over Ukraine, as well as the prospect of higher defence spending, helped to support
European equities, with the STOXX 600 up 3.4%, Italy’s FTSE MIB 6.0% and Spain’s IBEX 35 7.9%.
It was "a decent month" for both industrial and precious metals, with copper up 5.5% and gold 2.1%, having hit an all-time closing high of $2,952/oz on February 24.
On the downside, the slump in tech stocks hit US equities more broadly, with the S&P 500 down 1.3% in total return terms, with the Magnificent 7 falling 8.7%, their largest monthly decline since December 2022.
Brent crude oil lost 4.7% in February, falling to $73.18/bbl, and WTI fell 3.8% to $69.76/bbl.
7.16am: FTSE to kick off March with a bang
The FTSE 100 is set to kick the week and the month of March off with a bang and jump to another all-time high, while bitcoin and other cryptocurrencies are also in the spotlight.
London's blue-chip share index is predicted to surge around 50 points higher at the open in future markets, continuing the good momentum from last week, where 150 points were added over the five days to close just shy of 8,810.
Over the whole of February, the UK benchmark advanced by just over 226 points or 2.6%.
Cryptocurrencies are also on the front foot, with bitcoin up 6.7% and Ethereum 7.2% over the past 24 hours.
XRP, Solana and Cardano have surged 17%, 12% and 52%, respectively. More on that in a sec.
5am: What to watch today
Bunzl will be in focus on Monday, alongside lending figures from the Bank of England.
Pricing will be a key focus when Bunzl updates... Read more
Announcements due on Wednesday:
Finals: Bunzl PLC, Senior PLC, Smithson Investment Trust PLC, Quartix Technologies PLC
AGMs: CC Japan Income & Growth Trust PLC, Cloudbreak Discovery PLC, Ramsdens Holdings PLC, Mears Group PLC
Economic announcements: BoE Consumer Credit (UK), Manufacturing PMI (UK), Inflation (EU), Manufacturing PMI (US)