By Graeme Evans

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Donald Trump’s combative message on Ukraine today fuelled fresh demand for BAE Systems and other defence stocks in the FTSE 100 index.

BAE neared record territory with a rise of 2% or 32p to 1983p, while Rolls-Royce added 10.5p to 1174.5p and naval shipyards business Babcock International lifted 22p to 1201p.

Their gains, which followed Trump’s comments that Ukraine could win back territory from Russia, failed to prevent a negative performance by London’s top flight.

The FTSE 100 index dipped 17.26 points to 9206.06, reflecting losses on Wall Street after Federal Reserve head Jerome Powell painted a mixed picture on the outlook for interest rates.

AJ Bell investment director Russ Mould said: “Powell’s measured take, as he seeks to balance risks posed by inflation and a stuttering labour market, was in direct contrast to his recently appointed Fed colleague Stephen Miran who made the case for more aggressive cuts 24 hours earlier.”

Other risers included JD Sports Fashion, which climbed half a penny to 89.1p after interim results provided reassurance on US tariffs and the full-year outlook.

Adjusted profits fell 13.5% to £351 million but total sales were 18% higher at £5.9 billion, driven by the acquisitions of US-based Hibbett and Europe’s Courir.

Peel Hunt left forecasts and a price target of 200p unchanged following the results.

The broker said: “A lot depends on the Nike pipeline and consumer confidence over Christmas and beyond but the shares are priced for disappointment, and we do not think that is at all the likely outcome.”

Big fallers in the FTSE 100 included Burberry, which dropped 3% or 31p to 1112p, and Barclays following a decline of 6.15p to 383.15p.

In the FTSE 250, defence-focused Qinetiq and Chemring lifted 2% and Avon Technologies rose 1%.

Baltic Classifieds lost 12% or 38p to 278p after it said the ongoing impact of tax changes in the Estonian car market meant revenues and profit growth will be 3-4% below previous expectations.

Pinewood Technologies, which supplies cloud-based software in the car retail sector, fell 39p to 490p after half-year results included a one-off accounting adjustment of £1.3 million.

Underlying earnings rose 14.5% to £7.9 million, while new medium-term guidance for 2028 backed a full-year figure between £58 million-£62 million.

Berenberg said this represented a material uplift to City expectations, prompting the bank to raise its price target to 700p from 590p previously.

In the FTSE All-Share, Saga rose 5p to 222p after a strong half-year performance by its travel business contributed to upgraded profit guidance for the financial year.

On The Beach also reported a strong summer but shares slid 15% or 37.6p to 219.9p as its estimate for annual profits missed City forecasts.