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British defence companies and suppliers shot up on Tuesday morning after President Donald Trump called for a sharp increase in US military spending.
Shares in Babcock rose as much as 3 per cent in early trading, to 911p, putting it top of the FTSE 100. The company, which supplies support services for military customers, had previously said it expects to benefit as President Trump puts pressure on Nato members to boost spending.
BAE Systems, the UK’s largest defence company, was also one of the biggest gainers on the benchmark index, with shares rising as much as 2.3 per cent. At publication time they were up 1.9 per cent to 630p.
On the FTSE 250, Meggitt was the biggest beneficiary, with shares in the maker of aircraft components rising 8.6 per cent to 451p. The company’s military arm accounts for around a third of revenues. Meggitt had also reported a fall in annual profits that was not as bad as expected.
The announcement even provided a rare ray of light for troubled Cobham, whose shares climbed 1.2 per cent on a broadly flat day for the wider index.