27th May 2025 11:54
(Alliance News) - European blue chips continued to climb at midday on Tuesday, boosted by increases to defence spending, as German stocks record gains at an all-time high.
The FTSE 100 index was up 80.74 points, 0.9%, at 8,798.71. The FTSE 250 was up 228.10 points, 1.1%, at 20,936.82, and the AIM All-Share was up 4.11 points, 0.6%, at 740.15.
The Cboe UK 100 was up 1.1% at 876.70, the Cboe UK 250 was up 1.4% at 18,444.99, and the Cboe Small Companies was 0.4% at 16,654.49.
In European equities on Tuesday, the CAC 40 in Paris rose 0.3%, while the DAX 40 in Frankfurt improved 0.7%. The DAX 40 reached a record high on Tuesday, hitting 24,161 points - a 21% rise since the turn of the year.
The rally in Germany has been driven in part by the strong performance of defence stocks, after parliament passed a landmark package to finance a hike in military spending in March.
German arms firm Rheinmetall was trading up 2.2% at EUR1,883.00 per share on Tuesday - more than tripling since the start of the year, and up more than 20 times since Russia's invasion of Ukraine in February 2022.
Other German defence companies, such as Renk and Hensoldt, have also performed well on the second-tier MDax index.
EU countries on Tuesday formally approved a new EUR150 billion loan programme to help rearm in the face of Russia and worries over US reliability, according to the Polish presidency of the bloc.
The SAFE borrowing scheme backed by the EU's central budget was proposed by Brussels in March as the bloc rushes to boost its defences. After lengthy negotiations, the agreement stuck to the original proposal allowing 35% of the value of the weapons to come from manufacturers beyond the bloc and Ukraine.
The borrowing programme is part of a package of measures including loosening budget rules that Brussels says could potentially unlock EUR800 billion of defence spending.
At the same time, Nato members are expected to agree to raise their defence expenditure to 5% of economic output, according to Secretary General Mark Rutte. A new target is set to be agreed at the Nato summit in the Dutch city of The Hague in June.
According to the Nato head, of that, significantly more than 3% would go towards traditional defence spending - internal documents mention 3.5%. The rest could go towards defence-related spending, such as military infrastructure, including railway lines, tank-compatible bridges and expanded ports.
Brent oil was quoted lower at USD64.27 a barrel at midday in London on Tuesday from USD64.71 late Friday.
Gold was quoted down at USD3,293.43 an ounce against USD3,356.90.
"Gold prices remained under pressure on Tuesday, as hopes for a resolution to US-EU trade tensions reduced immediate safe-haven demand. President Donald Trump’s decision to delay the imposition of a 50% tariff on European goods until July 9 allowed for renewed negotiations, and Brussels signalled its willingness to accelerate talks. This de-escalation lifted risk appetite and weighed on the bullion," commented Exness analyst Maria Agustina Patti.
"However, the broader environment remains favourable for gold. Persistent concerns over the US fiscal trajectory continue to cast a shadow over long-term economic stability. At the same time, expectations that the Federal Reserve could resume rate cuts later this year could favour non-yielding assets."
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 1.4%, the S&P 500 index 1.5% higher, and the Nasdaq Composite up 1.7%.
The yield on the US 10-year Treasury was quoted at 4.47%, narrowing from 4.51%. The yield on the US 30-year Treasury was quoted at 4.97%, narrowing from 5.04%.
The pound was quoted up at USD1.3538 at midday on Tuesday in London, compared to USD1.3509 at the equities close on Friday. The euro stood slightly lower at USD1.1345, against USD1.1348. Against the yen, the dollar was trading up at JPY144.10 compared to JPY142.70.
Jangada Mines was up 20% around midday.
The London-based and Brazil-focused miner noted investee Blencowe Resources PLC's receipt of the latest USD500,000 disbursement from the US International Development Finance Corp. This takes the total funds received by Blencowe under the USD5.0 million technical assistance grant to USD4.0 million.
Jangada Chair Brian McMaster said: "The achievements over the quarter mark great progress and importantly the positive micronisation results translate into a significant uplift to the basket price, increasing the value of the product and underpinning Blencowe's end-to-end processing strategy.
"We look forward to further news in the near term, on-ground advancements and the completion of the [definitive feasibility study], which we believe will trigger a significant revaluation of Blencowe's share price."
Jangada owns an around 7% stake in Blencowe, which has faded 5.0% in London on Tuesday.
Cambridge Nutritional Sciences rose 11%.
The London-based medical diagnostics firm expects to report pretax profit of GBP1.6 million for the year that ended March 31, swung from a GBP750,000 loss the year before. Total income is anticipated up 12% to around GBP11.1 million from GBP9.9 million.
Adjusted earnings before interest, tax, depreciation and amortisation are expected at GBP400,000, doubled from GBP200,000 a year prior.
"The new financial year has started positively as the growing revenue pipeline starts to flow through," said Cambridge Nutritional. "This is early evidence of the more target focused delivery of the revenue strategy for FY26."
At the other end, Catenai shed 8.4%.
The London-based digital media and technology company said its investee company Alludium Ltd has been accepted into Nvidia Corp's Inception programme, a global initiative supporting startups developing artificial intelligence and data science innovations.
Catenai owns an 8.3% stake in Alludium, a London-based no-code platform that enables users to build custom AI agents and teams to automate tasks and integrate with everyday apps.
Catenai said the move marks a "significant step forward" for the startup's AI-focused ambitions, and that the partnership will help Alludium scale its AI Agent Builder platform and open up potential distribution channels through Nvidia’s global network.
Still to come on Tuesday's economic calendar, the Redbook and house price indices from the US.
By Emily Parsons, Alliance News reporter
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