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The FTSE 100 closed higher yesterday after British defence stocks rallied across the board following Norway’s record-breaking order of British-made warships and a top stockbroker handed Babcock an upgrade.

Gold mining stocks also benefited as gold pushed towards a new all-time high of more than $3,500 per ounce.

Shares in BAE Systems rose by nearly two per cent after the Ministry of Defence (MoD) confirmed the Nato member had placed an order for five of the arms manufacturer’s anti-submarine warships worth some £10bn.

The commission for the Type 26 Frigates is the UK’s largest ever warship export deal by value, and promises support 4,000 jobs in the UK “well into the 2030s”, the defence ministry claimed.

BAE Systems’ valuation has risen by over 55 per c

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