U.K. stocks ended slightly higher Tuesday as investors waited to hear from President Donald Trump about his plans for infrastructure and other spending in the U.S.
The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.34% edged up 0.1% to close at 7,263.44. The blue-chip benchmark achieved a February gain of 2.3%.
Investors are focused on a key address by Trump before a joint session of Congress, in hopes of getting more details about his administration’s plans for boosting growth in the world’s largest economy.
While the speech is not scheduled to begin until after the close of London trading—9 p.m. Eastern Time Tuesday, or 2 a.m. London time Wednesday—some information has emerged. On Monday, Trump said he would have a “big statement” on infrastructure and said his first budget proposal would include a “historic increase” in military spending.
Shares of aerospace and defense group Meggitt PLC /zigman2/quotes/208933633/delayed UK:MGGT +2.26% jumped 13%, also finding support from the company’s plan to raise its dividend. The stock is part of the midcap FTSE 250 /zigman2/quotes/210598417/delayed UK:MCX +1.44% , which finished 0.5% higher at 18,770.71.
Over in the FTSE 100, Babcock International Group /zigman2/quotes/200965934/delayed UK:BAB +5.13% , which supplies support services to U.K. armed forces, climbed 7.1%, with the company on Tuesday backing its fiscal 2017 outlook.
Defense contractor Rolls-Royce Holdings PLC jumped 2.5%, and defense and aerospace supplier Cobham PLC added 1.5%.
Investors are “cautiously optimistic about Trump’s congressional address, desperately wanting more clarity about the policy ideas fueling this rally,” said Accendo Markets analysts Mike van Dulken and Henry Croft, in a note.
Global equity markets have risen since Trump’s victory in the presidential election in November, fueled by optimism that his promises of tax reform and fiscal stimulus will translate into growth for the world’s largest economy.
Trump to propose 'historic' increase in military spending
Trump said on Monday his first budget will include a "historic increase" in military spending. He said the proposal will focus on public safety and national security.
“Expect much more about increased military spending at the expense of agency budgets, although anything on infrastructure spending could be enough to make up for silence on tax to soothe any bullish nerves,” Dulken and Croft said.
In London, FTSE 250 construction company Balfour Beatty PLC /zigman2/quotes/202863772/delayed UK:BBY +0.27% picked up 0.9%. But shares of building materials maker CRH PLC /zigman2/quotes/201759252/delayed UK:CRH +0.79% , a FTSE 100 component, finished down 0.9% following Monday’s rise of 2.9%.
Other movers: Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL +0.76% finished 0.2% higher. The company’s De Beers Group reported a 25% fall in diamond sales during the second cycle of the year, though the drop was in line with its expectations.
Fresnillo PLC /zigman2/quotes/201300065/delayed UK:FRES -0.38% closed unchanged, recovering from a morning drop, as the precious metals miner raised its dividend and posted higher profit in 2016.
Economic update: Consumer confidence in the U.K. fell in February, a survey by GfK showed, a sign that personal finances may be being squeezed by a rise in inflation from the fall of the pound after the Brexit vote.