FTSE 100 Climbs on Rebounding Bank and Defence Stocks

The UK's FTSE 100 index rose 0.2% as bank and defence stocks surged, driven by U.S. President-elect Trump's call for NATO spending. Notably, HSBC and Barclays saw significant gains. Shell's decline limited overall advances. Utility stocks dipped amid expectations of reduced UK interest rate cuts.

The UK's FTSE 100 index edged up on Wednesday, gaining a boost from resurgent bank stocks as well as a rise in aerospace and defence shares. This followed U.S. President-elect Donald Trump's call for increased spending from NATO allies, which brought renewed optimism in these sectors.

By 1040 GMT, the blue-chip FTSE 100 was up 0.2%, in contrast to the decline of 0.4% in the FTSE 250 midcap index. Banking stocks led gains on the FTSE 100, with a 1.7% rise after a prior decline. HSBC and Barclays marked notable advancements, hitting multi-year highs.

However, Shell's decline by 1.4% due to a reduced outlook for LNG production and expected weak trading results curtailed more significant gains. Meanwhile, British government bond yields remained elevated, influencing utilities to fall 1.4%, as expectations build for limited interest rate cuts by the Bank of England.

(With inputs from agencies.)