LONDON, Jan 2, 2026, 06:33 ET — Premarket
- Rolls-Royce shares rose about 2.6% in London trading, tracking broader strength in defence and aerospace names.
- The move came as London’s FTSE 100 pushed above 10,000 for the first time, lifting sentiment at the start of the year.
- Investors are also eyeing the start of Rolls-Royce’s interim share buyback and the company’s late-February results.
Rolls-Royce Holdings shares climbed 2.6% to 1,180 pence, according to Davy data, extending a strong start to 2026 for London-listed defence and aerospace names. The stock traded as high as 1,194 pence and as low as 1,155.78 pence. 1
The rally matters because it has reset the tone for UK equities after a strong 2025, with money flowing into large, globally exposed blue-chips rather than domestic UK cyclicals. For Rolls-Royce, the early bid underscores how quickly sentiment can swing back to cash-generative industrials when risk appetite improves.
London’s FTSE 100 crossed the 10,000-point mark on the first trading session of 2026, with defence and aerospace leading gains, Reuters reported. “It is a powerful signal for UK markets,” said Axel Rudolph, senior financial analyst at IG. 2
Rolls-Royce’s move comes against a backdrop of rising investor interest in UK stocks, which trade at lower valuations than many U.S. peers and have limited direct exposure to the artificial intelligence rally that dominated global markets last year.
Defence-linked shares have remained sensitive to headlines on military procurement and broader European security priorities, which have helped keep the sector in focus even as airline demand and engine flying hours underpin parts of Rolls-Royce’s civil aerospace business.
Company-specific support is also on the radar. Rolls-Royce said in December it would begin an interim, non-discretionary share buyback of up to £200 million starting Jan. 2, with the programme expected to complete no later than Feb. 24. 3
A share buyback is when a company uses cash to repurchase its own shares, typically reducing the share count and returning money to shareholders. Rolls-Royce said UBS would execute the programme and the shares acquired would be cancelled.
The next major company checkpoint is its full-year 2025 results, which Rolls-Royce said it expected to communicate on Feb. 26. The company also said the total amount of buybacks planned for 2026 remains subject to board review and is expected to be announced alongside those results.
Investors are likely to focus on cash generation and guidance, particularly any signals on how much of the group’s improving balance-sheet capacity will be returned to shareholders versus reinvested in programmes across civil aerospace, defence and newer markets.
Rates remain a secondary driver for the broader UK market: expectations that monetary policy headwinds ease can lift sentiment for large-cap equities, even when day-to-day moves are being set by sector rotation.
