London markets started Monday on a positive note, shaking off last week’s banking-led sell-off. The FTSE 100 opened 0.5% higher at 9,396.84, the FTSE 250 added 0.1% to 21,807.47, while the AIM All-Share slipped slightly to 772.00.
Financial stocks led the gains, with HSBC up 1.7%, Standard Chartered rising 2.1%, Lloyds adding 1.4%, and Barclays climbing 1.5%. Investor sentiment was buoyed by reports that the US and China will hold another round of trade talks this week, easing concerns over another round of tit-for-tat tariffs.
Defence shares also attracted attention. Babcock jumped 2.9%, BAE Systems gained 1.5%, and Rolls-Royce added 2.8%. European defence names followed suit: Rheinmetall in Frankfurt climbed 4.4%, Leonardo in Milan was up 3.2%, and Safran in Paris rose 2.1%. The rally came after news that President Zelensky left Washington without new US missile support, with President Trump urging negotiations with Vladimir Putin.
Not all sectors shared the optimism. B&M European Value Retail tumbled 15% after admitting an accounting error and cutting profit guidance. The retailer now forecasts adjusted EBITDA of £470–520 million, down from £510–560 million, and announced the departure of CFO Mike Schmidt.
Among mid-caps, Ithaca Energy surged 4.8% after Jefferies upgraded the stock to buy, raising its price target to 220p. Meanwhile, Bank of Ireland rose 0.2%, while Secure Trust Bank fell 2% as both flagged potential increases to provisions linked to the UK motor finance commission redress scheme.
Markets in Asia provided additional support, with Tokyo’s Nikkei 225 up 3.4%, Hong Kong’s Hang Seng jumping 2.5%, the Shanghai Composite rising 0.6%, and Australia’s S&P/ASX 200 climbing 0.4%. Wall Street’s late-week rebound also helped set the tone, with the Dow, S&P 500, and Nasdaq all gaining 0.5% on Friday.
For now, London traders are cautiously optimistic. Banks are bouncing, defence and energy sectors are showing strength, and trade talks have given risk appetite a gentle nudge. But as always, a single headline could shift the mood quickly.