FTSE 100: Defence stocks on the front foot but miners slump

London’s FTSE 100 was down 0.5% at 6,302.52 at 1420 GMT, as metals prices declined, with blue chip miners Glencore, Antofagasta and BHP Billiton all firmly in the red.

Aerospace and defence stocks Rolls-Royce and BAE Systems were the standout gainers, with prime minister David Cameron set to announce a £12bn increase to the defence budget.

“The prime minister’s defence review has been somewhat upset by recent events, but this has proven to be good news for BAE and Rolls-Royce, which have risen today on expectations that the UK will boost its armed forces to help cover the twin problems of a resurgent Russia and fresh terror threats,” said Chris Beauchamp, senior market analyst at IG.

HSBC was a high riser as Standard Life Investments’ head of equities, David Cumming, said it would back the bank if it decides to relocate its headquarters outside the UK to escape increasingly burdensome regulations.

Cumming said HSBC was being put at a "competitive disadvantage" by "ever-increasing capital requirements".

"Logically, we would be supportive of a move if they chose to do that," he told BBC Radio 4's Today programme.

The warning comes ahead of the results of the Bank of England's latest round of stress tests, due for publication on 1 December.

On the downside, Tesco suffered the heaviest falls after it emerged that losses at Harris & Hoole – the coffee chain part-owned by the supermarket retailer – doubled last year following a rapid expansion. Pre-tax losses at the coffee chain widened to £25.6m in the year ending 1 March 2015 from £12.8m the previous year.

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 566.00p 2.54%
BAE Systems (BA.) 498.20p 1.26%
HSBC Holdings (HSBA) 536.70p 1.05%
Babcock International Group (BAB) 995.50p 0.66%
Mondi (MNDI) 1,519.00p 0.60%
Johnson Matthey (JMAT) 2,719.00p 0.52%
Inmarsat (ISAT) 1,057.00p 0.48%
Fresnillo (FRES) 699.00p 0.43%
CRH (CRH) 1,908.00p 0.42%
Ashtead Group (AHT) 1,064.00p 0.38%

FTSE 100 - Fallers

Tesco (TSCO) 167.35p -2.39%
RSA Insurance Group (RSA) 429.50p -2.14%
Glencore (GLEN) 90.44p -2.05%
TUI AG Reg Shs (DI) (TUI) 1,104.00p -2.04%
Antofagasta (ANTO) 498.40p -1.89%
Royal Bank of Scotland Group (RBS) 303.70p -1.87%
Burberry Group (BRBY) 1,258.00p -1.80%
Intu Properties (INTU) 322.20p -1.74%
BHP Billiton (BLT) 871.60p -1.57%
Merlin Entertainments (MERL) 405.20p -1.55%