US stocks rally after bruising week while defence stocks lift FTSE

Global stock markets were given a boost on Friday with US stocks rallying after a bruising week, while aerospace giants helped lift the FTSE 100 higher as global defence spending talks continued.

New York’s top index, the S&P 500, was making strides after markets opened, reversing some of the heavy losses from recent days.

In London, the FTSE 100 gained 89.77 points, or 1.055, to end the week at 8,632.33.

Aerospace and defence giants Melrose Industries, BAE Systems and Rolls-Royce were leading the charge with their share prices moving more than 3% higher.

Global leaders have continued talks over ending Russia’s war in Ukraine, with G7 allies calling for a ceasefire with “no conditions”.

Prime Minister Sir Keir Starmer will convene a summit of European and Commonwealth nations on Saturday to consider support options, which he has said could include deploying British peacekeeping troops to Ukraine.

The stronger session for the FTSE came despite a surprise contraction in the economy in January, according to new official figures.

Gross domestic product (GDP) declined by 0.1% in January amid a sharp decline in the manufacturing sector, surprising economists who had forecast a slight increase.

In the US, the S&P 500 was climbing about 1.8%, and Dow Jones was 1.4% higher by the time European markets closed.

The Friday rally brings an end to a turbulent week for US stocks which have faced a battering as investors weigh up the impact of new tariffs announced by President Donald Trump.

Europe’s top indexes also ended the week higher, with Germany’s Dax rising 1.86%, and France’s Cac 40 up 1.13%.

In currencies, the pound was weakening on Friday.

Sterling was down about 0.2% against the US dollar, at 1.292, and 0.5% against the euro, at 1.187.

In company news, house builder Berkeley Group said home sales were improving and it was on track to make at least £957 million in pre-tax profits over the next two financial years.

The firm said it was hugely encouraged by the Government’s planning reforms and housing targets, but said regulatory changes such as the new building safety levy were putting pressure on the completion of new homes.

Shares in Berkeley rose 1.4%.

Vanquis Banking Group’s shares dropped on Friday after the specialist lender revealed it swung to an adjusted pre-tax loss of £35 million last year, from a profit the previous year.

Vanquis said it had been a pivotal year with a number of challenges, but it had made “significant progress” on efforts to increase cost savings and address structural problems.

Shares in Vanquis closed 5.3% lower.

The biggest risers on the FTSE 100 were Melrose Industries, up 31.8p to 528p, BAE Systems, up 66.5p to 1,657p, Games Workshop, up 500p to 14,900p, Rolls-Royce, up 25p to 796.4p, and Scottish Mortgage Investment Trust, up 27.8p to 967.6p.

The biggest fallers on the FTSE 100 were Tesco, down 32.3p to 339.2p, Sainsbury’s, down 19.8p to 235p, Marks & Spencer, down 18.4p to 334.4p, WPP, down 15.8p to 616.2p, and Spirax, down 145p to 6,965p.