British defence shares opened higher on Tuesday after Prime Minister Andy Burnham appointed former defence secretary John Healey as chancellor of the Exchequer.
The market move reflects investor confidence that the new finance minister’s background will ensure continuity in the government’s aggressive defence investment agenda.
The appointment comes amid a broader rally in the UK defence sector.
Shares in Rolls-Royce and BAE Systems have climbed sharply in recent sessions following Prime Minister Keir Starmer’s announcement of a new defence investment plan.
Investors are pricing in the expectation that Healey, who previously oversaw the Ministry of Defence, will prioritize military spending in the upcoming budget.
The sector’s momentum is driven by the perception that the UK government is committed to increasing defence expenditure to meet NATO targets and address geopolitical uncertainties.