FTSE 100 Rises as Defence Stocks Gain

London stocks close mixed amid quiet trading due to US holiday

Published on Feb. 16, 2026

Got story updates? Submit your updates here. ›

The FTSE 100 index in London closed up 0.3% on Monday, boosted by gains in banking and defense stocks, while the FTSE 250 and AIM all-share indexes ended lower in a day of thin trading due to a holiday in the US. NatWest led the way on the FTSE 100, climbing nearly 5% as it started a GBP750 million share buyback program. Defense stocks also rose after UK Prime Minister Keir Starmer said Britain must "go faster" on defense spending.

Why it matters

The rise in defense stocks reflects growing concerns about geopolitical tensions and the need for increased military capabilities, particularly in light of the ongoing conflict in Ukraine. The mixed performance of the broader London market highlights the cautious sentiment among investors amid global economic uncertainty.

The details

NatWest's share buyback program and the prime minister's comments on defense spending were the main drivers behind the FTSE 100's gains on Monday. Shares in defense companies like Melrose Industries, Babcock International, and BAE Systems all rose by more than 3% in response to the government's pledge to increase defense spending. Meanwhile, the FTSE 250 and AIM all-share indexes declined slightly due to the thin trading volumes caused by the US holiday.

  • The FTSE 100 closed up 0.3% on Monday, February 16, 2026.
  • The FTSE 250 ended down 0.2% and the AIM all-share closed down 0.1% on the same day.
  • US financial markets were closed on Monday for Washington's Birthday, and Canadian markets were closed for Family Day.

The players

Keir Starmer

The UK Prime Minister who said Britain must "go faster" on defense spending.

NatWest Group

A major UK bank that started a GBP750 million share buyback program.

Melrose Industries

A defense company whose shares climbed 3.9% on the news.

Babcock International

A defense company whose shares rose 3.5% on the news.

BAE Systems

A defense company whose shares advanced 3.0% on the news.

Got photos? Submit your photos here. ›

What they’re saying

“We have a threat of Russian aggression. In a few days' time it's the four-year anniversary of the start of the conflict in Ukraine. We want a just and lasting peace, but that will not extinguish the Russian threat, and we need to be alert to that, because that's going to affect every single person in this room, every single person in this country, so we need to step up.”

— Keir Starmer, UK Prime Minister (BBC)

What’s next

The UK government is considering bringing forward its target to increase defense spending to 3% of GDP from 2029 to an earlier date.

The takeaway

The rise in defense stocks highlights the growing geopolitical tensions and the need for increased military capabilities, particularly in light of the ongoing conflict in Ukraine. This could have broader implications for the UK economy and its defense industry.