FTSE 100 movers: Defence stocks rise on spending hopes, Unilever drops

(Sharecast News) - Defence and banking stocks were dominating the risers list on the FTSE 100 on Tuesday, while Unilever led the fallers after the abrupt exit of its chief executive officer. BAE Systems was up 4%, continuing its recent rally on the back of renewed optimism for higher defence spending across Europe this year.

Helping sentiment was the news that the UK government is funding an increase in defence spending to 2.5% of GDP from 2027. Prime Minister Keir Starmer said on Tuesday that the government would start the biggest sustained increase in defence spending since the end of the cold war, and set out a "clear ambition" for defence spending to rise to 3% of GDP in the next parliament "subject to economic and fiscal conditions".

BAE has gained more than 15% over the past two weeks alone, helped by last week's news of record orders in 2024, with the company pointing to in excess of £30bn in sales in 2025.

Rolls-Royce, another firm with heavy exposure to the defence sector, was also putting in gains. The two stocks were rising on Monday in the aftermath of Germany's elections amid optimism that defence spending would be increased.

Another high riser was Smith & Nephew as the medical equipment maker's full-year profit and revenue beat downgraded forecasts, driven by a rebound in its US knee and hip implant unit, which offset continuing headwinds in China. Revenue jumped 4.7% to $5.8bn, while operating profit surged 54.6% to $657m.

Banking stocks were performing well, with HSBC, NatWest, Standard Chartered, Lloyds and Barclays all among the top 10 risers.

Leading the fallers was Unilever, slipping more than 2% after announcing that chief executive is leaving "by mutual agreement" following just 19 months at the helm. Hein Schumacher will be replaced by Fernando Fernandez, who has been the company's chief financial officer since January 2024.

Specialty chemicals group Croda was slightly lower after meeting its profit guidance in 2024, but slightly missing consensus with 2025 earnings targets.

Meanwhile, Unite Group edged higher after reporting a sharp rise in earnings for 2024, supported by strong rental growth and high occupancy rates. The student accommodation provider said adjusted earnings rose 16% to £213.8m.

FTSE 100 - Risers

BAE Systems (BA.) 1,359.00p 4.14% Smith & Nephew (SN.) 1,079.00p 3.40% HSBC Holdings (HSBA) 902.60p 2.84% NATWEST GROUP (NWG) 454.70p 2.48% Standard Chartered (STAN) 1,204.50p 2.38% CRH (CDI) (CRH) 8,054.00p 2.29% Lloyds Banking Group (LLOY) 68.74p 2.11% Airtel Africa (AAF) 143.20p 1.85% Barclays (BARC) 304.05p 1.69% Rolls-Royce Holdings (RR.) 616.20p 1.62%

FTSE 100 - Fallers

Unilever (ULVR) 4,380.00p -2.30% Ashtead Group (AHT) 4,739.00p -2.01% Rio Tinto (RIO) 4,907.50p -1.99% JD Sports Fashion (JD.) 80.28p -1.95% Associated British Foods (ABF) 1,873.00p -1.86% Spirax Group (SPX) 7,485.00p -1.77% Bunzl (BNZL) 3,312.00p -1.66% Scottish Mortgage Inv Trust (SMT) 1,057.50p -1.54% Halma (HLMA) 2,841.00p -1.08% Pearson (PSON) 1,336.00p -1.04%