Shares in Babcock International and Rolls-Royce climbed in early London trading following the announcement of a new appointment for John Healey, the UK Secretary of State for Defence.
The market move signals continued investor confidence in the British defence sector, building on momentum from earlier in the week.
The rally comes shortly after Prime Minister Keir Starmer unveiled a new defence investment plan, which triggered sharp gains for Rolls-Royce and BAE Systems on Monday.
Investors are interpreting the Healey appointment as a signal of policy continuity and sustained government commitment to the UK's defence industrial strategy.
The sector has benefited from a broader repricing of defence stocks amid rising geopolitical tensions and increased government spending pledges.
Babcock, a key provider of defence support services, and Rolls-Royce, with its significant military engine portfolio, are both direct beneficiaries of the UK government's long-term defence commitments.