UK stocks rise as aerospace stocks gain

The blue-chip FTSE 100 index was 0.2% higher, after starting September on a dull note, while the mid-cap FTSE 250 rose 0.1%

A recovery in aerospace and defence stocks lifted UK's main index on Tuesday, while investors prepared for a flurry of global economic data that could shape bets on the pace of potential rate cuts from major central banks this month.

The blue-chip FTSE 100 index was 0.2% higher as of 0715 GMT, after starting September on a dull note, while the domestically-focused mid-cap FTSE 250 rose 0.1%.

Rolls-Royce gained more than 3%, after Monday's steep losses, as Hong Kong's Cathay Pacific Airways noted that the three of the 48 British engine supplier's planes under inspection went through successful repairs and all of the jets were expected to resume operation by Saturday.

This boosted the aerospace and defence index added around 2%, after logging its sharpest one-day decline since November 2022 on Monday.

Watches Of Switzerland Group climbed 6% after the firm said it is on track to deliver its full-year forecast.

Ashtead Group jumped 3.4% after the equipment rental firm said it expects full-year results in line with earlier expectations, while Hikma Pharmaceuticals added 2% after Berenberg upgraded the British drugmaker's shares to "buy" from "hold".

Meanwhile, miners were the worst hit, tracking weak base metal prices.

All eyes are on this month's monetary policy decisions by central banks - the U.S. Fed, the ECB and the BoE.

As both the Fed and the ECB are widely seen reducing rates in September, any upcoming data on inflation and economic performance would be key to determine the quantum of such cuts.