ADVFN UK Market News

Author: Fiona Craig

  • European Stocks Hold Near Record Highs as Investors Await Fed Minutes and Central Bank Signals: DAX, CAC, FTSE100

    European Stocks Hold Near Record Highs as Investors Await Fed Minutes and Central Bank Signals: DAX, CAC, FTSE100

    Markets Pause Following Strong Rally

    European equity markets traded little changed on Monday, remaining close to record highs after a strong performance last week. Investors adopted a more cautious approach ahead of several important central bank speeches and a series of economic releases expected to provide fresh direction for global markets.

    The pan-European STOXX 600 remained close to its all-time high, supported by growing expectations that easing inflation and a softer U.S. labour market could reduce pressure for additional interest rate increases.

    Germany’s DAX, France’s CAC 40 and the UK’s FTSE 100 all traded broadly flat in early dealings.

    Falling Inflation Expectations Continue to Support Equities

    European shares ended last week at record levels, with both the STOXX 600 and Euro Stoxx 50 reaching new highs. Germany’s DAX outperformed, helped by strong gains in major industrial companies, including Siemens, and a widening market rally that extended beyond technology stocks.

    Investor sentiment also benefited from weaker-than-expected U.S. employment data, which strengthened expectations that the Federal Reserve could adopt a less aggressive approach to monetary tightening.

    Lower oil prices have also eased concerns over energy-driven inflation after geopolitical tensions in the Middle East pushed crude prices higher earlier in the year.

    Cyclical sectors such as industrials, manufacturing and financials attracted strong investor inflows throughout the previous week.

    Attention Turns to Central Banks

    The main focus for investors now shifts to Wednesday’s publication of the minutes from the Federal Reserve’s latest policy meeting.

    Markets expect the minutes to retain a relatively hawkish tone, reflecting policymakers’ earlier projections that at least one further interest rate increase could still be delivered this year. However, those forecasts were made before the recent decline in crude oil prices, which may improve the inflation outlook.

    Investors will also closely follow comments from Federal Reserve Governor Christopher Waller, European Central Bank President Christine Lagarde, and ECB Executive Board members Isabel Schnabel and Philip Lane for further guidance on the interest rate outlook.

    Economic Data to Test Recovery Momentum

    This week’s economic calendar will also provide fresh insight into the strength of the Eurozone economy.

    Key releases include retail sales and producer price inflation for May across the euro area, together with Germany’s industrial production figures.

    The data will help investors assess whether manufacturing activity is beginning to recover and whether consumer demand is showing signs of stabilisation.

    easyJet Leads Individual Movers

    Among individual companies, easyJet (LSE:EZJ) was one of the strongest performers, rising almost 10% after agreeing in principle to support Castlelake’s proposed takeover offer.

  • Eurozone Bond Yields Steady as German 10-Year Bund Retreats from Recent High

    Eurozone Bond Yields Steady as German 10-Year Bund Retreats from Recent High

    Markets Pause Ahead of Key Economic Data

    Eurozone government bond yields were little changed on Monday, with Germany’s benchmark 10-year Bund yield easing after reaching its highest level in two weeks. Investors adopted a cautious stance as they awaited a busy week of economic releases and central bank communications expected to shape interest rate expectations.

    The German 10-year Bund yield slipped from last week’s peak of 2.95% to around 2.91%, while the policy-sensitive two-year Bund remained broadly unchanged, reflecting limited trading activity before several important macroeconomic events.

    Lower Oil Prices and Softer Inflation Support Bonds

    Monday’s consolidation followed the first weekly increase in Eurozone government bond yields since early June, when benchmark yields rose by roughly eight basis points.

    The bond market has been supported by declining energy prices and weaker-than-expected Eurozone inflation data. Brent crude traded near $71.66 per barrel as hopes of renewed Middle East peace talks reduced supply concerns, helping to limit upward pressure on government bond yields.

    At the same time, the yield curve has continued to flatten as investors reassess the outlook for monetary policy.

    Focus Turns to Federal Reserve and ECB Signals

    Fixed-income markets are largely holding positions ahead of Wednesday’s release of the minutes from the U.S. Federal Reserve’s June policy meeting.

    Although recent U.S. labour market data have pointed to slower economic momentum and strengthened expectations that interest rates may peak sooner than previously anticipated, investors expect the minutes to maintain a relatively hawkish tone, reflecting policymakers’ earlier projections for at least one additional rate increase this year.

    Attention in Europe will also centre on comments from several European Central Bank officials, including President Christine Lagarde and Chief Economist Philip Lane.

    Busy Week for Eurozone Economic Indicators

    Markets will also monitor a series of important economic releases, including Eurozone retail sales, producer price data and Germany’s industrial production figures for May.

    The data are expected to provide further insight into whether manufacturing activity across the euro area is beginning to recover after an extended period of weakness.

  • European Defense Stocks Rally as NATO Warns Industry Is Struggling to Meet Demand

    European Defense Stocks Rally as NATO Warns Industry Is Struggling to Meet Demand

    European defense shares posted strong gains on Monday after NATO Secretary-General Mark Rutte said the alliance’s growing military spending is stretching the capacity of defense manufacturers ahead of this week’s NATO summit in Ankara, Turkey.

    Italy’s Fincantieri SpA (BIT:FCT) led the sector higher, jumping 12.84% to €12.30 by 08:30 GMT. Other major defense names also advanced, including Leonardo SpA (BIT:LDO), Saab AB (TG:SDV1), Indra Sistemas (TG:IDA), Hensoldt AG (TG:HAG), Rheinmetall AG (TG:RHM), Thales (EU:HO), Dassault Aviation SA (EU:AM) and Safran SA (EU:SAF).

    NATO Shifts Focus from Commitments to Implementation

    Speaking to The Wall Street Journal ahead of the summit, Rutte said NATO has entered a new phase in its defense spending programme.

    “A year ago was all about promises” of additional military spending, he said. This year, “it’s about delivery,” reflecting the alliance’s focus on turning commitments into operational capability.

    According to NATO, military expenditure by member states excluding the United States rose 20% last year compared with 2024, reaching $574 billion. Data from the Stockholm International Peace Research Institute showed Germany increased defense spending by 24% to $114 billion, with Berlin aiming to raise that figure to around $180 billion by 2029.

    Production Capacity Becoming a Constraint

    Rutte warned that the rapid increase in defense orders is putting significant pressure on manufacturers, noting that around $300 billion worth of weapons has already been ordered from U.S. suppliers.

    “We are basically reaching the absorption-capacity level,” he said, identifying limited industrial production and difficulties recruiting and training military personnel as the two principal constraints.

    U.S. Ambassador to NATO Matthew Whitaker also argued that Europe’s defense industry would benefit from greater consolidation, saying higher military budgets must result in additional equipment rather than higher costs.

    Summit Expected to Generate New Defense Contracts

    TD Cowen said this week’s NATO summit will focus on military spending, industrial production capacity and continued support for Ukraine, with U.S. President Donald Trump expected to press allies on burden-sharing and implementation of NATO’s target of spending 5% of GDP on defense.

    The broker expects fresh investment announcements and new defense contracts linked to the summit, developments that could further support U.S. foreign military sales, which are already running at record levels.

    TD Cowen also identified drones and counter-drone technologies as the most attractive area for future defense spending, citing a lasting shift in modern warfare and the growing need to protect critical infrastructure.

    The NATO summit takes place on 7-8 July in Ankara, alongside a dedicated defense industry forum where officials are expected to announce new contracts, preliminary agreements and joint-production initiatives.

  • Airbus Targets 900 Aircraft Deliveries Internally After Strong June Performance

    Airbus Targets 900 Aircraft Deliveries Internally After Strong June Performance

    June Delivery Momentum Lifts Internal Expectations

    Airbus (EU:AIR) is reportedly aiming to deliver around 900 aircraft in 2026 under an internal performance target, following a strong June in which the aircraft manufacturer handed over 89 commercial jets, according to industry sources.

    Despite the improved momentum, Airbus has not altered its official full-year guidance and continues to forecast 870 aircraft deliveries for the year.

    China Catch-Up and Supply Improvements Support Output

    Sources said June’s performance was driven by Airbus accelerating deliveries that had previously been delayed to Chinese customers. Production has also benefited from an easing in engine supply constraints, allowing more aircraft to be completed and delivered.

    The stronger monthly performance has raised internal confidence that deliveries could exceed the company’s published target if production continues to improve during the second half of the year.

    Company Declines to Comment

    Airbus did not respond to requests for comment regarding the reported internal delivery objective. Bloomberg reported on Friday that the European aircraft manufacturer had delivered approximately 90 aircraft during June, broadly in line with the figures cited by industry sources.

  • FTSE 100 Opens Higher as Investors Monitor Ukraine, Iran and OPEC+ Supply Decisions

    FTSE 100 Opens Higher as Investors Monitor Ukraine, Iran and OPEC+ Supply Decisions

    UK equities traded modestly higher on Monday as investors assessed geopolitical developments in Ukraine and Iran alongside the latest OPEC+ production decision and a busy domestic news agenda. Market participants also kept a close watch on political developments ahead of a key NATO summit and fresh UK economic data.

    As of 07:15 GMT, the FTSE 100 was up 0.26%. Germany’s DAX slipped 0.02%, while France’s CAC 40 gained 0.30%. Sterling eased 0.11% against the U.S. dollar to $1.3338.

    Ukraine and Iran Remain in Focus

    Russian President Vladimir Putin and U.S. President Donald Trump held a telephone conversation lasting almost 90 minutes on Sunday, according to Russia’s foreign ministry, marking their fourth discussion this year.

    The ministry said Trump “reaffirmed his readiness to facilitate the earliest possible cessation of hostilities” in Ukraine and described the talks as “businesslike and highly constructive.”

    Separately, Ukrainian President Volodymyr Zelensky said he had a “very good call” with Trump on Saturday, adding, “There is a real prospect to put an end to this war, and America’s resolve is decisive.” The discussions came ahead of a NATO summit opening in Turkey on Tuesday, which Trump is expected to attend.

    Meanwhile, Iran began a 12-hour funeral procession in Tehran for the country’s late Supreme Leader, Ayatollah Ali Khamenei, marking the third day of national mourning.

    His successor, Mojtaba Khamenei, has not appeared publicly since the 28 February airstrike that killed his father. Iranian officials have said he was injured in the attack and has communicated only through written statements. Public life across Tehran has been heavily disrupted during the mourning period, which is scheduled to conclude with Ayatollah Khamenei’s burial in Mashhad on Thursday.

    UK Political and Oil Market Developments

    In UK politics, Makerfield MP Andy Burnham, widely viewed as a potential successor to Prime Minister Keir Starmer, ruled out calling an early general election if he were to become prime minister.

    “No. As I said in my speech on Monday, I’m going to work to the 2024 manifesto,” Burnham said in response to a question on Reddit. He also indicated he would seek to move Labour towards electoral reform in its next manifesto.

    Conservative leader Kemi Badenoch criticised Burnham’s decision to answer questions on Reddit rather than holding a traditional media briefing, urging him to “face a proper press conference.”

    Elsewhere, seven OPEC+ members—Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman—agreed to increase combined oil production by 188,000 barrels per day from August, marking the fifth consecutive monthly output increase.

    Brent crude futures for September delivery fell 0.42% to $71.82 a barrel, while U.S. WTI crude for August delivery slipped 0.32% to $68.47. Gold futures for August rose 0.91% to $4,162.51 an ounce, although spot gold declined 0.60% to $4,150.56.

    UK Corporate Round-Up

    easyJet (LSE:EZJ) agreed in principle to support a proposed £5.5 billion takeover by U.S. investment firm Castlelake at £6.90 per share, a transaction that could significantly reshape the European airline sector.

    Ocado (LSE:OCDO) confirmed that founder Tim Steiner will remain chief executive until the start of 2028 before moving into a Founder role through 2029 as part of a planned leadership succession.

    ITV (LSE:ITV) agreed to sell its Media and Entertainment division to Sky in a deal worth up to £1.6 billion, allowing ITV Studios to become a standalone content production business while adding Love Productions to its portfolio.

    Separately, the Society of Motor Manufacturers and Traders reported that UK new car registrations increased by around 11% year on year in June, with battery electric vehicles accounting for 30% of all new registrations.

  • Close Brothers Falls After RBC Cuts Rating on Renewed Motor Finance Uncertainty (CBG)

    Close Brothers Falls After RBC Cuts Rating on Renewed Motor Finance Uncertainty (CBG)

    Shares in Close Brothers Group (LSE:CBG) dropped more than 5% on Monday after RBC Capital Markets downgraded the stock to “sector perform” from “outperform” and reduced its price target to 470p from 625p, pointing to fresh uncertainty surrounding the Financial Conduct Authority’s motor finance redress scheme.

    Judicial Review Delays Add to Regulatory Uncertainty

    RBC noted that Close Brothers shares finished at 439.80p on 3 July, valuing the lender at approximately £658 million.

    The broker said it was “surprised” that the Upper Tribunal approved a judicial review of the FCA’s proposed motor finance redress scheme. The decision, confirmed last week, means the case is now unlikely to be heard until either December 2026 or February 2027, extending the timetable by at least three months compared with the FCA’s previous expectation that proceedings would not begin “before Oct’26.”

    RBC also argued that the Court of Appeal’s decision last Tuesday to permit motor finance mass omnibus claims “scans negatively.” Despite the legal developments, the FCA has maintained its position that, should the redress scheme proceed, compensation payments would begin during 2027.

    Potential Financial Impact Remains Significant

    According to RBC, Close Brothers currently holds a £320 million provision based on the FCA’s existing proposal and is not expected to alter that figure for now. However, the regulator has instructed firms to prepare for a complaints-led process, including “making the necessary provisions and ensuring appropriate capital is maintained.”

    The FCA has estimated that abandoning the current redress scheme could increase administrative costs for lenders by around £6.3 billion. RBC estimates Close Brothers’ share of that burden could reach approximately £200 million, equivalent to around 230 basis points of its Common Equity Tier 1 capital.

    Dividend Expectations Reduced

    RBC believes the prolonged regulatory uncertainty is likely to result in Close Brothers postponing any dividend announcement alongside its fiscal 2026 results. As a result, the broker has removed its previous forecast for a 5p dividend from its financial estimates.

    The analysts also said Close Brothers is expected to generate the weakest value creation among 50 European banks over the next three years, adding that “we believe the shares could drift from here.”

    Valuation Scenarios and Key Risks

    RBC’s revised 470p price target is derived from a linear residual income model using the average of its adjusted 2027 and 2028 forecasts, discounted back to fiscal 2026 with a cost of equity assumption of 13.75%.

    The broker’s upside case values the shares at 700p, assuming the company’s cost of equity falls to levels comparable with larger UK banking peers. Its downside scenario of 250p assumes the FCA’s motor finance review has a more severe financial impact than currently expected.

    RBC highlighted several risks that could affect its investment case, including litigation outcomes, further pressure on net interest margins, a UK recession leading to higher defaults among small and medium-sized businesses, execution risks surrounding cost reduction initiatives, and the possibility that Close Brothers fails to secure approval for an internal ratings-based capital approach.

  • Market Open: easyJet Takeover Terms, ITV Sky Deal

    Market Open: easyJet Takeover Terms, ITV Sky Deal

    Markets opened steady as easyJet backed Castlelake’s takeover terms and ITV agreed a £1.6bn Sky deal, while Brent crude edged lower.

    Market Overview

    UK markets opened little changed, with the FTSE 100 broadly flat, while the Euronext 100 and Germany’s DAX edged higher. Investors continued to monitor developments surrounding Ukraine and Iran alongside expectations for upcoming Federal Reserve minutes and comments from central bank policymakers. European equities remained close to record levels despite a cautious tone. Oil prices softened after OPEC+ agreed to raise output targets. US markets were closed on Friday for the Independence Day holiday.

    In commodities, copper strengthened while gold, Brent crude and natural gas all edged lower. Bitcoin fell against sterling. Currency markets were broadly steady, with sterling little changed against the US dollar, euro, Swiss franc, Japanese yen and Australian dollar.

    Market Numbers

    FTSE 100: Up (0.00%), 10,679.38

    Euronext 100: Up (0.03%), 1,939.03

    DAX: Up (0.13%), 25,811.91

    In the Headlines

    Takeover Terms – easyJet (LSE:EZJ)

    easyJet has agreed in principle to support a recommended £6.90-per-share takeover proposal from Castlelake, subject to due diligence and final documentation. The agreement represents a significant step towards a potential acquisition, although no firm offer has yet been made.

    Strategic Restructure – ITV (LSE:ITV)

    ITV has agreed to sell its Media business to Sky in a transaction valued at up to £1.6 billion, allowing ITV Studios to operate as a standalone global content company. The deal reshapes the UK broadcasting landscape while enabling ITV to focus on content production and return capital to shareholders.

    Currencies (vs GBP)

    USD: Unchanged (0.00%), $1.3353

    CHF: Unchanged (0.00%), Fr.1.0733

    EUR: Unchanged (0.00%), €1.1675

    JPY: Unchanged (0.00%), ¥215.5955

    AUD: Up (0.02%), $1.9249

    Bitcoin (BTC/GBP): Down, £47,218.88

    Commodities

    Copper: Up

    Gold: Down

    Brent Crude: Down

    Natural Gas: Down

  • easyJet Supports Proposed £6.90-a-Share Takeover Terms from Castlelake (EZJ)

    easyJet Supports Proposed £6.90-a-Share Takeover Terms from Castlelake (EZJ)

    easyJet (LSE:EZJ) has reached agreement in principle on the principal financial terms of a recommended cash offer from U.S. investment firm Castlelake, L.P. to acquire the shares it does not already own at £6.90 per share. The proposal also includes a partial unlisted share alternative for eligible shareholders.

    Following discussions with its advisers, the easyJet board said it would be prepared to recommend a formal offer to shareholders if Castlelake submits a firm bid on the agreed financial terms and the remaining transaction conditions are successfully negotiated.

    Offer Remains Subject to Further Conditions

    The potential acquisition remains conditional on several customary requirements, including the completion of satisfactory due diligence and agreement on definitive transaction documentation. As a result, there is no certainty that a binding offer will ultimately be made.

    The UK Takeover Panel has extended Castlelake’s “put up or shut up” deadline until 5.00 pm on 3 August 2026. In the meantime, the company has advised shareholders not to take any action until further announcements are issued.

    If completed, the transaction could significantly reshape easyJet’s ownership structure while supporting the airline’s long-term strategy, including continued investment in fleet modernisation.

    Outlook Supported by Improving Fundamentals

    easyJet’s outlook continues to benefit from improving profitability, a strong balance sheet and an attractive valuation, supported by a relatively low price-to-earnings ratio and dividend yield. Technical indicators also remain positive, although recent share price gains suggest momentum may be becoming stretched.

    Management’s latest earnings commentary was broadly encouraging, highlighting strong liquidity and confidence in medium-term targets. However, the company continues to monitor cost inflation and demand trends, which remain important factors for near-term performance.

    More about easyJet

    easyJet plc is one of Europe’s largest low-cost airlines, operating an extensive network of short-haul leisure and business routes across the continent. The company continues to invest in fleet renewal to improve operating efficiency, reduce emissions and strengthen its competitive position within the European aviation market.

  • ITV Agrees £1.6bn Sale of Media Business to Sky as Studios Becomes Standalone Content Group (ITV)

    ITV Agrees £1.6bn Sale of Media Business to Sky as Studios Becomes Standalone Content Group (ITV)

    ITV plc (LSE:ITV) has reached an agreement to sell its Media and Entertainment division to Sky, part of Comcast, in a transaction valued at up to £1.6 billion. The deal will combine ITV’s broadcasting and streaming operations with Sky’s pay television and streaming platforms. Under the agreement, ITV will receive £1.2 billion in cash together with ownership of Love Productions, while ITV Media & Entertainment and Sky have committed to maintaining free-to-air programming and preserving ITV’s public service broadcasting responsibilities, including national news, until at least 2034.

    Shareholder Returns and Balance Sheet Strengthened

    Following completion of the transaction, ITV expects net cash proceeds of approximately £1.05 billion after separation costs. The company intends to return around £950 million, equivalent to 25p per share, to shareholders, with the remaining proceeds earmarked for reducing debt and strengthening the balance sheet.

    Once the sale is completed, ITV Studios will operate as a standalone London-listed content production company. Its future earnings will be supported by a long-term supply agreement with ITV Media & Entertainment and Sky valued at a minimum of £2.1 billion between 2028 and 2032. The addition of Love Productions, creator of formats including The Great British Bake Off, is also expected to enhance the studio’s international content portfolio.

    Strategic Shift Towards Global Content Production

    ITV believes the transaction will unlock the full value of ITV Studios by allowing it to focus exclusively on content creation and distribution. Management expects the standalone business to deliver organic revenue growth ahead of the wider market, EBITA margins of between 13% and 15%, and strong cash generation capable of supporting future investment and shareholder returns.

    For Sky, the acquisition creates a larger UK media and entertainment business with greater scale to invest in programming, technology and streaming capabilities. The enlarged group is intended to strengthen competition with international streaming platforms while maintaining the ITV brand and fulfilling its long-term public service broadcasting commitments.

    Outlook Reflects Strategic Opportunity and Operational Challenges

    ITV’s outlook remains supported by improving revenue trends and a healthier leverage position. However, profitability and cash generation continue to face pressure, while technical indicators suggest only a modest upward trend with broadly neutral momentum. Valuation remains attractive, supported by a mid-range price-to-earnings ratio and a relatively high dividend yield.

    Recent management commentary has been cautiously optimistic, highlighting continued growth at ITV Studios, expanding digital operations and ongoing cost discipline. These positives are balanced against continued weakness in linear television advertising, margin pressure, softer cash conversion and uncertainty surrounding the strategic review of the Media & Entertainment business.

    More about ITV plc

    ITV plc is a UK media and entertainment company best known for operating one of the country’s leading public service broadcasters. Through ITV Studios, the group produces, distributes and licenses entertainment, drama and factual programming for audiences around the world, while its Media & Entertainment division has traditionally operated the ITV broadcast network, ITVX streaming platform and advertising-supported television services across the UK.

  • BTG Consulting Posts Double-Digit Revenue Growth as Dividend Increases for Ninth Straight Year (BTG)

    BTG Consulting Posts Double-Digit Revenue Growth as Dividend Increases for Ninth Straight Year (BTG)

    BTG Consulting (LSE:BTG) delivered a strong full-year performance for the year ended 30 April 2026, with revenue rising 10% to £168.5 million, supported by 8% organic growth and continued strength in its restructuring and real estate divisions. Adjusted profit before tax increased 6%, while statutory profit before tax climbed 23% as non-underlying costs declined. Operating margins edged lower during the year as the company continued investing in senior talent despite softer conditions across transactional markets.

    Cash Generation Supports Acquisitions and Higher Shareholder Returns

    The group generated £14.1 million of free cash flow during the year and moved to a modest net debt position after financing acquisitions, share buybacks and dividend payments. BTG also proposed a 7% increase in its total dividend, extending its record of annual dividend growth to nine consecutive years and reflecting the board’s confidence in the business’s long-term prospects.

    Rebrand and Strategic Expansion Drive Growth

    During the year, BTG completed its corporate rebrand and consolidated its auction operations under the BTG name. The company also completed acquisitions to strengthen its capabilities in real estate and restructuring services while continuing to invest in its leadership team.

    Supported by a healthy pipeline of work, management said the business remains focused on achieving its medium-term revenue target of £200 million, despite continued macroeconomic uncertainty.

    Outlook Balances Strong Fundamentals with Market Headwinds

    BTG’s outlook is underpinned by solid financial performance, healthy cash generation and strategic corporate initiatives that continue to strengthen the business. Technical indicators, however, suggest a degree of caution, with bearish market signals pointing to weaker near-term momentum. Valuation also appears relatively demanding, although the company’s acquisition strategy and consistent dividend growth provide supportive long-term fundamentals.

    More about BTG Consulting

    BTG Consulting plc is a UK-based financial and real estate advisory group providing restructuring, corporate advisory, consultancy, valuation, asset services and property auction solutions. The business combines counter-cycclical restructuring activities with transaction-led services, giving it a diversified revenue base across multiple markets.

    The group has established leading positions in several specialist sectors, including commercial property, where it ranks among England’s most active agents, and corporate restructuring, where it is one of the UK’s leading insolvency and advisory firms.