Author: Fiona Craig

European equity markets traded mostly lower on Thursday, as investor sentiment was dampened by rising geopolitical unease after the United States signalled potential action over Greenland, following recent events in Venezuela.

By 08:05 GMT, Germany’s DAX was up 0.2%, while France’s CAC 40 slipped 0.1% and the UK’s FTSE 100 declined 0.3%.

Greenland developments unsettle investors

Attention across European markets has turned sharply to Greenland after U.S. President Donald Trump suggested that military force could be used to secure control of the semi-autonomous Danish territory.

Concerns intensified after U.S. military action in Venezuela over the weekend led to the capture and transfer of President Nicolas Maduro to the United States, raising fears in Europe that Greenland could face similar pressure.

U.S. Secretary of State Marco Rubio said on Wednesday that he plans to meet Danish officials next week. Addressing reporters, Rubio stated:
“If the president identifies a threat to the national security of the United States, every president retains the option to address it through military means. As a diplomat, which is what I am now, and what we work on, we always prefer to settle it in different ways,”

Both Denmark and the United States are NATO members, and any U.S. military move against Greenland would likely have far-reaching implications for the alliance.

Economic data sends mixed signals

On the macro front, German factory orders rose 5.6% month-on-month in November, pointing to a stronger finish to 2025 for the eurozone’s largest economy. In contrast, UK house prices fell 0.6% in December on a monthly basis, according to Halifax data.

Market focus is now shifting to Friday’s U.S. nonfarm payrolls report, the most closely watched data release of the week. Federal Reserve policymakers have repeatedly highlighted employment as a key factor in rate decisions, with markets currently pricing in two interest rate cuts this year.

Corporate updates: Sodexo and Greggs

In corporate news, Sodexo (EU:SW) reported organic revenue growth of 1.8% in its first quarter, slightly ahead of market expectations. However, adverse currency movements weighed on results, resulting in a 2.2% decline in reported revenue.

Meanwhile, Greggs plc (LSE:GRG) delivered a strong finish to the year, with fourth-quarter total sales rising 7.4%. Like-for-like sales in company-managed shops increased by 2.9% over the period.

Oil prices rebound after inventory data

Crude prices moved higher on Thursday following two consecutive sessions of losses, supported by a larger-than-expected decline in U.S. crude inventories, although developments in Venezuela continued to dominate attention.

Brent crude futures rose 0.3% to $60.11 a barrel, while U.S. West Texas Intermediate crude gained 0.2% to $56.11 a barrel.

According to data released Wednesday by the Energy Information Administration, U.S. crude stockpiles fell by 3.8 million barrels to 419.1 million barrels in the week ended January 2, compared with expectations for a modest increase.

The Wall Street Journal reported on Thursday that the Trump administration is considering measures to exert influence over Venezuela’s state-owned oil company, Petróleos de Venezuela SA (PdVSA), potentially aiming to shape control of the country’s oil sector over the long term.

Leonardo (BIT:LDO) and the wider defence sector remained firmly in focus across European markets on Thursday, following comments from Donald Trump signalling his intention to significantly raise US defence spending.

Shares in the former Finmeccanica group surged at the open in Milan, jumping more than 4.5% to move above €60 per share, setting a new all-time high after only reaching a previous record of €57.36 the day before. The rally marked Leonardo’s sixth consecutive session of gains, taking the stock up more than 20% over just a few trading days.

Buying interest spread across Milan’s defence names, with Fincantieri (BIT:FCT) trading around €20.10 to rank among the strongest FTSE MIB performers after Leonardo, while Avio (BIT:AVIO) also advanced by about 1.2%.

The positive momentum extended across Europe. BAE Systems (LSE:BA.) rose around 6%, while Germany’s Renk (TG:R3NK) gained roughly 4% and Rheinmetall (TG:RHM) climbed about 3%. Elsewhere, Kongsberg (TG:KOZ1), Dassault Aviation (EU:AM), Saab (BIT:1SAAB) and Hensoldt (TG:HAG) all posted gains of between 2% and 2.5%.

Trump has called for a 50% increase in annual defence spending, a move that could lift the budget to around $1.5 trillion by 2027. He framed the proposal as central to achieving what he described as a “Dream Military,” one he believes would be the most powerful and technologically advanced force globally.

A major pillar of the proposal is investment in advanced technologies. Trump stressed that additional funding should be channelled into new weapons systems, missile defence and cyber capabilities, with the aim of ensuring the US military remains ahead of potential adversaries. The scale of the proposed increase, however, has raised broader questions about its longer-term implications.

On the corporate side, Bank of America reiterated its buy rating on Leonardo shares on Wednesday, while trimming its price target slightly to €62.60 from €63 ahead of the group’s quarterly update and preliminary 2025 results due on 24 February.

Despite signs that a ceasefire between Russia and Ukraine may now be closer than at any point in the past four years—prompting some investors to consider taking profits—Europe’s defence sector continues to attract support from analysts.

Bernstein remains constructive, arguing that geopolitical developments do not materially alter the long-term spending outlook. “Regardless of the situation in Ukraine, we believe the outlook for military spending remains unchanged: Europe needs to rearm,” the broker said. It added: “We believe the sector will tactically recover from the correction and move into a second phase of the European cycle, where performance will be determined by increased exposure to countries and segments.”

Bernstein continues to view Rheinmetall as its top sector pick, citing Germany’s defence spending plans and the company’s geographic proximity to Russia. The broker also upgraded Thales to outperform and reaffirmed its outperform stance on Leonardo. In contrast, BAE Systems and Dassault Aviation were downgraded to market-perform, while TKMS was upgraded to market-perform after post-IPO weakness brought the valuation back to what Bernstein considers fair.

UK equities moved lower at Thursday’s open, extending recent weakness, while sterling edged down against the US dollar. Broader European markets were mixed as investors digested a combination of macro moves and company-specific updates from the retail and energy sectors.

By 08:30 GMT, the FTSE 100 was down around 0.3%, while the pound slipped 0.1% against the dollar to roughly 1.34. In continental Europe, Germany’s DAX rose 0.3%, while France’s CAC 40 eased 0.1%.

UK round-up

Overall, early trading reflected cautious sentiment, with currency weakness and profit warnings weighing on UK equities, partially balanced by upbeat updates from parts of the grocery and food-to-go sector.

Shell issues Q4 2025 trading update

Shell plc (LSE:SHEL) released its fourth-quarter 2025 trading update ahead of full-year results due on 5 February 2026. The group guided for LNG liquefaction volumes of 7.5–7.9 million tonnes for the quarter, up from 7.3 million tonnes in Q3. Integrated Gas production is expected to average between 930,000 and 970,000 barrels of oil equivalent per day.

Associated British Foods shares slide on profit warning

Shares in Associated British Foods plc (LSE:ABF) fell sharply in early trading, dropping around 11% after the company warned that annual profit would come in below last year’s level. The Primark owner pointed to weaker trading in continental Europe and softer demand across parts of its US food operations. By 08:16 GMT, the stock was still down 11% as investors reacted to the downgrade. Management also reversed its previous outlook for 2026, now expecting both adjusted operating profit and earnings per share to decline year on year.

Greggs posts steadier Q4 sales growth

Greggs plc (LSE:GRG) reported a relatively resilient fourth-quarter performance despite ongoing consumer pressures. Like-for-like sales improved to 2.9% in Q4 from 1.5% in Q3, while total sales increased by 7.4%, up from 6.1% in the previous quarter. The company gained market share during the period, although results came in below management’s earlier guidance of around 4% growth. Despite this, the board said full-year 2025 profit before tax is expected to remain in line with prior expectations of roughly £173m.

Tesco lifts profit guidance after strong Christmas

Tesco plc (LSE:TSCO) raised its profit outlook following a stronger-than-expected Christmas trading period. The UK’s largest grocer now expects adjusted operating profit for the 2025/26 financial year to land at the top end of its £2.9bn–£3.1bn guidance range, supported by higher sales across most divisions during the third quarter and festive period.

Marks & Spencer reports solid festive trading

Marks and Spencer Group PLC (LSE:MKS) said it welcomed a record number of shoppers over the Christmas period, with group sales rising to £4.99bn in the 13 weeks to 27 December 2025. Excluding Ocado Retail, which has been consolidated since April 2025, sales increased by 3.3%. Performance was driven primarily by strength in food, offsetting a more challenging consumer backdrop elsewhere in the business.

Orosur Mining Inc (LSE:OMI) released strong gold assay results from the final three infill drill holes completed at the Pepas prospect within its Anzá project in Colombia, confirming the presence of substantial near-surface, high-grade mineralisation.

Highlights from the latest drilling include 47.60 metres grading 3.43 grams per tonne of gold from surface in hole PEP072B, 104.45 metres at 5.96 grams per tonne from surface in PEP073, and 71.35 metres at 6.46 grams per tonne from surface in PEP074. The results further reinforce the scale and continuity of mineralisation at Pepas.

With the completion of the infill programme, Orosur has now delivered the full gold assay dataset to independent resource consultants, who have commenced work on the Mineral Resource Estimate (MRE) modelling process. In parallel, the company has started evaluating potential development and economic extraction pathways for Pepas under Colombia’s permitting regime, including early engagement with local technical advisers on environmental and social study requirements.

Following the Christmas break, drilling activities have resumed at Anzá with the mobilisation of a new rig to begin a regional reconnaissance programme north of the Pepas deposit. This work is designed to improve understanding of the broader litho-structural controls on mineralisation across the wider project area.

Orosur has also significantly expanded its land position, with two major mineral exploration applications successfully converted into exploration licences. As a result, the area covered by granted exploration licences has increased by 65% to 173 square kilometres, all located within the mining-supportive Anzá municipality.

Commenting on the progress, Orosur CEO Brad George said: “The Company starts 2026 in a very different position to a year ago. One deposit (hopefully) soon to enter feasibility, two rigs turning in two countries and an increasing list of high-quality targets lining up to be next. Exciting times.”

The Anzá Project comprises a portfolio of exploration titles and applications covering approximately 327 square kilometres within the Mid-Cauca gold belt, west of Medellín. Orosur secured 100% ownership of the project in November 2024 following the acquisition of Minera Monte Aguila from its former joint venture partners, Newmont Mining and Agnico Eagle Mines.

More about Orosur Mining Inc

Orosur Mining Inc is a Latin America–focused gold exploration and development company with projects in Colombia and Argentina. The company is advancing the Anzá gold project in Colombia while also progressing exploration and development activities across its broader portfolio, with a strategy centred on resource growth and value creation through disciplined exploration and project advancement.

Computacenter (LSE:CCC) announced the acquisition of US-based technology services firm AgreeYa in a deal valued at approximately $120m, marking a further step in expanding its presence and capabilities in the American market. The transaction deepens Computacenter’s exposure to higher-margin services activity, differentiating it from the group’s earlier US acquisitions, which were largely focused on reseller operations.

AgreeYa is a services-led business employing more than 600 staff in the United States and over 700 in India. Its capabilities span professional services across Workplace, Cloud and Applications, alongside headcount augmentation, adding scale and breadth to Computacenter’s existing services offering in the region.

For 2025, AgreeYa generated revenues of around $120m and adjusted EBITDA of approximately $14m. Computacenter said the acquisition is expected to be immediately earnings accretive, delivering a mid-single-digit profit contribution in 2026. Following completion, the group’s US services-based revenue is expected to exceed $350m.

The deal also highlights the growing importance of the US market to Computacenter’s overall performance. The proportion of group profits generated in the US has risen significantly, from around 4% in 2018 to an estimated 32% in 2025, underlining the strategic rationale behind continued investment and expansion in the region.

More about Computacenter

Computacenter plc is a UK-headquartered IT infrastructure and services provider supporting large corporate and public sector customers. The group delivers technology sourcing, professional services and managed services across workplace, cloud, applications and data centre environments, with operations spanning Europe, the Americas and Asia-Pacific.

Greggs (LSE:GRG) reported full-year 2025 sales growth of 6.8% to £2.15bn, with like-for-like sales in company-operated shops rising 2.4%. The performance outpaced a challenging UK food-to-go market, with the group gaining visit share across key dayparts, particularly breakfast and evening. Trading was delivered against a backdrop of subdued consumer confidence and some weather-related disruption.

Cost control remained a key focus, with operational discipline and structural efficiencies delivering around £13m in savings during the year. Greggs continued to expand its footprint at pace, opening 207 shops and adding 121 net new locations, taking the estate to 2,739 sites. Growth was supported by ongoing product innovation, targeted promotions and a strong value proposition.

The group is also making significant investments in supply chain infrastructure to support future growth. A new frozen product manufacturing facility in Derby is scheduled to begin phased operations from mid-2026, while a national chilled and ambient distribution centre in Kettering remains on track for completion in 2027. Management said capital expenditure has now passed its peak and is expected to fall sharply from 2026 onwards, supporting improved cash generation from a year-end net cash position of £47m.

Looking ahead, Greggs expects profit before tax for 2025 to be in line with previous guidance, excluding a one-off sales tax item. For 2026, profits are expected to be broadly similar to 2025, as lower cost inflation, continued market share gains and estate growth are balanced against ongoing consumer pressure and temporary margin dilution associated with bringing new supply chain capacity on stream.

From a market perspective, Greggs’ outlook is underpinned by strong financial performance and a series of positive corporate developments. Technical indicators support a bullish view, while valuation appears fair, offering a balanced mix of growth and income potential.

More about Greggs plc

Greggs plc is a UK-based food-to-go retailer operating a large estate of company-managed and franchised outlets nationwide. The group specialises in affordable, bakery-led food such as breakfast items, sandwiches, pizzas and seasonal products, targeting value-conscious consumers and high-footfall locations. Greggs continues to expand into new formats and under-served catchments as it seeks to grow its market presence across the UK.

Marks and Spencer (LSE:MKS) reported a solid Christmas trading period for the 13 weeks ended 27 December 2025, generating group sales of £4.99bn and maintaining momentum in its ongoing transformation strategy. Food was the clear standout, with underlying sales up 6.6%, like-for-like growth of 5.6% and UK volumes rising 2.3%. This performance lifted M&S to a record 4.0% share of the UK grocery market, reinforcing its status as the country’s fastest-growing family grocer.

Growth in Food was driven by strength across core grocery categories, continued focus on quality and innovation—particularly in ranges such as Italian ready meals and in-store bakery—and rapid uptake of value propositions including ‘Remarksable Value’ and ‘Bigger Pack, Better Value’. Newly opened and refurbished stores continued to outperform the broader estate, supporting market share gains.

In Fashion, Home & Beauty, sales declined 2.5% overall, as weaker in-store trading and earlier stock data issues outweighed improved online performance. Despite this, M&S regained fashion market share leadership and now ranks first for customer perceptions of style, quality and value, signalling progress in its brand repositioning. International sales rose modestly by 0.9%, with growth in wholesale, online and food franchises offsetting softer shipments and weaker performance in India. Ocado Retail delivered particularly strong growth, with sales up 13.7%, M&S-branded products increasing 16.3% and accounting for around 30% of Ocado Retail revenue, underlining the strategic importance of the joint venture.

Management reiterated unchanged full-year guidance and highlighted plans to accelerate the transformation agenda, focusing on value investment, product innovation, store and digital upgrades, supply chain efficiencies and structural cost reductions, despite ongoing pressures from fragile consumer confidence and milder seasonal weather.

From a market perspective, Marks and Spencer’s outlook is supported by strong financial performance and positive corporate developments. However, valuation remains demanding, with a high price-to-earnings ratio, while bearish technical indicators weigh on near-term sentiment. Management commentary reflected a mixed picture, with clear progress in several areas balanced against ongoing challenges, leaving valuation and technical risks as key considerations.

More about Marks and Spencer

Marks and Spencer Group PLC is a UK-based retailer focused on food, fashion, homewares and beauty, serving family-oriented consumers through a combination of physical stores, online channels and its Ocado Retail joint venture. The group is repositioning itself as a value-led, ‘shopping list’ grocer while pursuing store rotation and digital enhancement to strengthen market share and brand perception across clothing, home and beauty categories.

Tesco (LSE:TSCO) reported a solid trading performance for the 19 weeks ended 3 January 2026, with group like-for-like sales rising 2.9%. Momentum was particularly strong in the UK and Republic of Ireland, where the retailer achieved its highest UK market share in more than ten years. Investment in price, product quality and service levels—especially across fresh food and the premium Finest range—supported a strong Christmas period, double-digit growth in online sales and continued expansion of rapid-delivery through Whoosh.

These gains were partly offset by softer performance in Booker’s tobacco category and the impact of exiting a supply contract. Tesco continued to reinforce its value proposition by extending its Everyday Low Prices initiative to more than 3,000 branded products, alongside Aldi Price Match and Clubcard-led promotions. Fresh-food-focused growth, product innovation and new store openings also contributed to market share improvements in Ireland and Central Europe.

Reflecting this trading momentum, Tesco now expects adjusted operating profit for the 2025/26 financial year to land at the upper end of its £2.9bn–£3.1bn guidance range, pointing to an improved earnings outlook and a strengthened competitive position within a highly competitive grocery landscape.

From a market perspective, Tesco’s outlook is supported by a stable financial base, although some challenges remain around revenue growth and cash flow. Technical indicators point to positive share price momentum, while valuation appears reasonable. Commentary from the latest earnings update was broadly constructive, with upgraded profit guidance and a sizeable share buyback programme further enhancing shareholder value.

More about Tesco plc

Tesco plc is a leading multinational grocery and general merchandise retailer headquartered in the UK. The group operates supermarkets, convenience stores and wholesale businesses across the UK, Ireland and Central Europe. Its core activities include food retail, fresh produce, home and clothing ranges, online grocery and rapid-delivery services, complemented by wholesale and foodservice operations through Booker, with a strong focus on value-led consumers and private-label brands such as its premium Finest range.

Central Asia Metals (LSE:CAML) reported that both of its producing assets delivered output in line with 2025 guidance, with the Kounrad operation producing 13,311 tonnes of copper and the Sasa mine generating 17,881 tonnes of zinc-in-concentrate alongside 25,156 tonnes of lead-in-concentrate. Safety performance remained strong across the group, with one lost time injury recorded at Kounrad and none at Sasa during the year. The company ended 2025 with a robust cash position of $80.1m.

During the year, the group initiated a wide-ranging efficiency programme at Sasa aimed at improving operational performance. Measures include targeted headcount reductions, deeper geological understanding of the orebody and enhanced mine planning. Central Asia Metals also achieved its 2026 target for environmentally preferable tailings storage ahead of schedule, reflecting progress on its sustainability objectives.

Looking ahead, 2026 production guidance reflects a gradual decline at Kounrad, consistent with its mature profile, offset by higher expected output at Sasa as improvement initiatives take effect. The company is also stepping up its exploration efforts in Kazakhstan and increasing investment in Aberdeen Minerals’ Arthrath project, reinforcing its strategy of optimising existing operations while building future growth options in base and battery metals.

From a market perspective, Central Asia Metals continues to demonstrate financial strength and balance sheet stability, supported by ongoing share buybacks that enhance shareholder returns. While technical indicators suggest the shares may be overbought in the near term, valuation remains reasonable and supported by an attractive dividend yield. Operational challenges at Sasa remain a key focus but are being actively addressed through targeted strategic actions.

More about Central Asia Metals

Central Asia Metals plc is an AIM-listed base metals producer operating the Kounrad dump-leach SX-EW copper facility in Kazakhstan and the Sasa zinc-lead mine in North Macedonia. The group also maintains an exploration and project appraisal focus in Kazakhstan and holds a strategic minority interest in Aberdeen Minerals’ nickel-copper-cobalt Arthrath project in Scotland. Central Asia Metals targets long-life, low-cost copper, zinc and lead assets, while using subsidiaries such as CAML X and CAML XD to expand its pipeline of battery and base metals opportunities.

ECR Minerals (LSE:ECR) announced a conditional £1.5m fundraising through a discounted placing of approximately 576.9 million new shares at 0.26 pence per share, strengthening the company’s balance sheet as it steps up development and production activity in Australia. Proceeds will be primarily allocated to bringing the Blue Mountain gold project in Queensland into production, supporting near-term output alongside the Raglan alluvial gold operation, and advancing exploration work at the Lolworth and Bailieston projects, with a portion reserved for corporate and working capital requirements.

Management said the new funding, together with anticipated cash flow from Raglan and Blue Mountain, is expected to finance planned operations well beyond 2026. The company reiterated its goal of evolving into a multi-site gold producer, underpinned by a growing portfolio of assets across Queensland and Victoria.

As part of the transaction, OAK Securities has been appointed as joint broker. Its first-year fees will be satisfied through the issue of new shares, with additional broker warrants granted, aligning the broker more closely with ECR’s long-term growth strategy. Subject to shareholder approval, admission of the new shares to AIM is expected around 15 January 2026, increasing the company’s issued share capital to approximately 3.29 billion shares. The board said the combination of fresh capital, a broader project pipeline and substantial tax losses positions ECR to scale its exploration and mining footprint and, over time, potentially cover corporate overheads from Raglan-generated cash flow.

More about ECR Minerals

ECR Minerals plc is a London-listed gold exploration and development company with a portfolio of projects in Australia, spanning Queensland and Victoria. The group is progressing early-stage production at the Raglan alluvial gold project and the Blue Mountain gold project in Queensland, while advancing exploration at the large-scale Lolworth multi-metal project in North Queensland and at Victorian assets including the Bailieston gold and antimony project area. ECR’s strategy is to transition into a multi-project gold producer supported by a pipeline of exploration assets and significant tax losses available to offset future profits.