The FTSE 100 closed up 0.1% on Tuesday at 10,497.12, while the FTSE 250 slipped 0.1% to 23,013.45 as mid-cap weakness offset gains in defence-heavy large caps and selected consumer names.
UK macro data from the Office for National Statistics showed gross domestic product rose 0.6% in the first quarter, unchanged from previous estimates. The reading pointed to continued expansion in the economy at the start of the year, with no revision to earlier output figures.
Defence stocks rose after Prime Minister Keir Starmer set out plans for almost £300 billion in defence spending over four years under a 10-year investment programme. Babcock International gained 3.3%, BAE Systems added 2.0% and QinetiQ rose 2.4%.
The programme covers expanded use of drones, uncrewed military systems and upgrades to the UK nuclear deterrent, alongside an additional £15 billion allocated through to 2030 as part of wider modernisation plans.
Sainsbury’s was one of the stronger performers on the FTSE 100, rising 1.3% after a quarterly update that showed continued growth in underlying trading. Total retail sales excluding fuel increased 2.7% year-on-year to £9.15 billion in the 16 weeks to 20 June, ahead of consensus expectations. Like-for-like sales rose 2.1%, also slightly ahead of forecasts, supported by steady grocery demand across its core UK operations.
Shell added 1.1% after Bloomberg reported it is close to selling its South African fuel retail network to a unit of Abu Dhabi National Oil for around $1 billion. The transaction would involve approximately 600 fuel stations and give the buyer around a tenth of the South African retail fuel market. Discussions between the parties are understood to be advanced, although no final agreement has been reached.
Elsewhere in Europe, equities finished higher with the CAC 40 up 0.4% in Paris and the DAX 40 rising 1.5% in Frankfurt, where industrial and export-linked stocks led gains across the session.
US equities finished higher with the Dow Jones Industrial Average rising around 0.3% to a fresh record, extending Monday’s move above 52,000. The S&P 500 gained 0.8% and posted its strongest quarterly performance since 2020, while the Nasdaq Composite climbed 1.5% as semiconductor stocks extended recent gains.