ADVFN UK Market News

Author: Fiona Craig

  • Oil Slides Further as Trump Halts Planned Military Action Against Iran

    Oil Slides Further as Trump Halts Planned Military Action Against Iran

    Oil prices extended their decline on Friday after U.S. President Donald Trump abandoned plans for military strikes against Iran, easing concerns that tensions in the region could escalate further following reciprocal attacks earlier in the week.

    At 0640 GMT, Brent crude futures were down $2.11, or 2.3%, at $88.27 per barrel, while U.S. West Texas Intermediate crude fell $1.90, or 2.2%, to $85.81 per barrel.

    Diplomatic Progress Weighs on Crude Markets

    The latest sell-off came after Trump indicated on Thursday that talks with Iran had advanced and that military action was no longer being considered for the time being.

    The U.S. president suggested that a peace agreement capable of restoring shipping through the Strait of Hormuz could be signed as early as this weekend, although Iranian officials cautioned that discussions had not yet reached a final conclusion.

    Tony Sycamore, market analyst at IG, said: “While this could, of course, be yet another false dawn, the market’s reaction has been both swift and decisive.”

    He also noted that despite the recent decline in prices, “as long as the price can hold above support in the low $80s, the risks remain firmly skewed to the upside”.

    Hormuz Shipping Situation Remains Uncertain

    The Strait of Hormuz continues to be a focal point for energy markets given its importance to global oil and gas flows.

    Iran announced on Thursday “the closure” of the waterway, where vessel movements had already been heavily restricted for several months. Authorities in Tehran warned that any ship attempting to navigate the passage could come under fire.

    Under normal conditions, roughly 20% of global oil and liquefied natural gas exports pass through the strait, making any disruption highly significant for international energy supplies.

    Iranian state media reported on Friday that the country’s forces had stopped a tanker from crossing the strait without prior approval.

    Meanwhile, the U.S. military stated on social media that commercial shipping traffic was continuing through the route.

    Analysts Warn Against Assuming the Crisis Is Over

    Despite the optimism surrounding the latest diplomatic developments, analysts stressed that the situation remains fragile.

    In a research note published on Friday, ING analysts wrote: “We would be cautious about assuming that the extension of the ceasefire is a done deal. Even if it is, it could be fragile. And clearly, if nuclear talks do not progress, it could very easily fall apart.”

    The bank also highlighted the risk that continued restrictions on oil shipments could tighten the market considerably over the coming weeks.

    “We believe the market reaches an inflection point in late July if we do not see oil flows resuming before then. This is when inventory levels and seasonally stronger demand push prices significantly higher towards $120-130 per barrel.”

    OPEC Lowers 2026 Demand Growth Forecast

    Separately, the Organization of the Petroleum Exporting Countries revised its outlook for oil demand growth next year.

    The group cut its forecast for 2026 global oil demand growth to 970,000 barrels per day, down from a previous projection of 1.17 million barrels per day, marking a second consecutive downgrade.

    At the same time, OPEC adopted a more optimistic view of longer-term demand trends and increased its growth forecast for 2027.

    The producer alliance now expects worldwide oil demand to rise by 1.73 million barrels per day in 2027, representing an upward revision of 190,000 barrels per day from its earlier estimate.

    Traders Continue to Balance Fundamentals and Geopolitics

    While weaker demand expectations have contributed to the recent decline in crude prices, geopolitical developments remain the dominant driver of market sentiment.

    Hopes that Washington and Tehran can reach a diplomatic resolution have helped ease immediate concerns over supply disruptions. However, uncertainty surrounding the Strait of Hormuz and the future of nuclear negotiations means energy markets remain vulnerable to renewed price swings in the weeks ahead.

  • Gold Firms as Traders Monitor Progress Toward Potential U.S.-Iran Accord

    Gold Firms as Traders Monitor Progress Toward Potential U.S.-Iran Accord

    Gold prices moved modestly higher on Friday, although the precious metal remained on course for a weekly decline as investors assessed the likelihood of a diplomatic agreement between the United States and Iran and the implications for inflation and monetary policy.

    By 05:29 ET (09:29 GMT), spot gold had gained 0.2% to $4,220.27 per ounce. Despite the uptick, bullion was still set to end the week more than 2% lower. Gold futures rose 3.1% to $4,241.51 per ounce.

    Diplomatic Developments Ease Energy Market Concerns

    Reports from Iranian state media indicated that a prospective agreement between Tehran and Washington could include the reopening of the Strait of Hormuz and the removal of U.S. sanctions on Iranian oil exports.

    According to Iran’s Mehr news agency, the proposed Memorandum of Understanding would also provide for the release of Iranian assets currently frozen abroad. The report noted that negotiations remain focused on economic and nuclear matters, while discussions surrounding Iran’s missile programme would not form part of the agreement.

    The proposal still requires approval from the relevant authorities before any final deal can be completed.

    Oil Retreats as Traders Price in Reduced Supply Risks

    Crude oil prices fell sharply as markets responded to signs of progress in negotiations.

    Brent crude, the international benchmark, declined 4.3% to $86.47 per barrel after slipping below the $90 mark on Thursday.

    The move followed comments from U.S. President Donald Trump suggesting that an agreement to end the conflict with Iran, now in its fourth month, could be within reach.

    While oil remains considerably higher than levels seen before the outbreak of hostilities, a sustained decline in crude prices could help alleviate fears that rising energy costs will fuel inflation and prompt additional monetary tightening by central banks.

    Such an environment is typically less supportive for gold, which does not generate interest income.

    Markets Continue to Focus on Federal Reserve Policy

    Attention also remains firmly fixed on the Federal Reserve.

    The U.S. central bank is widely expected to leave interest rates unchanged at next week’s meeting. However, investors continue to anticipate at least one additional rate increase before the end of the year.

    Expectations that policymakers would begin cutting rates during 2026 have largely faded as inflation remains elevated and economic activity continues to show resilience.

    Analysts at UBS said: “We are lowering our forecasts to reflect the expected delayed start of Fed rate cuts to 2027 and the resulting reduction in expected ETF gold demand in 2026. The environment for the yellow metal will likely remain challenging in the near term, but we continue to see a constructive outlook over the medium term as Fed rate cuts moderate real rates and the U.S. dollar.”

    ECB Rate Increase Adds Another Headwind

    The outlook for gold has also been affected by developments in Europe.

    Earlier this week, the European Central Bank became the first major central bank to raise interest rates in response to inflationary pressures linked to the conflict in Iran.

    Officials stressed the need to contain rising prices, reinforcing expectations that borrowing costs could remain elevated for an extended period.

    Softer Dollar Helps Limit Losses

    Despite the broader challenges, a weaker U.S. dollar provided some support for gold prices.

    A softer dollar generally improves the attractiveness of bullion for international buyers by reducing its cost in other currencies.

    Throughout much of the conflict, the dollar has benefited from safe-haven demand and the perception that the U.S. economy, as a major energy exporter, is better positioned than many other countries to withstand prolonged disruptions in energy markets.

    Friday’s decline in the currency, however, helped offset some of the pressure on precious metals and contributed to gold’s modest advance.

  • SpaceX IPO, Iran Peace Negotiations and Adobe Leadership Changes Drive Market Focus: Dow Jones, S&P, Nasdaq, Wall Street Futures

    SpaceX IPO, Iran Peace Negotiations and Adobe Leadership Changes Drive Market Focus: Dow Jones, S&P, Nasdaq, Wall Street Futures

    Investors Remain Cautious Ahead of Major Developments

    U.S. equity futures traded lower on Friday as investors monitored a series of market-moving events, including the record-breaking stock market debut of SpaceX (NASDAQ:SPCX) and renewed hopes for a diplomatic resolution to the conflict between the United States and Iran.

    At 03:13 ET (07:13 GMT), Dow futures were little changed, while S&P 500 futures slipped 0.2% and Nasdaq 100 futures declined 0.6%.

    The major Wall Street indices ended higher in the previous session despite a volatile trading day dominated by developments in the Middle East. Expectations of a possible peace agreement helped ease concerns over energy-driven inflation, offsetting stronger-than-forecast U.S. producer price data.

    Analysts at Deutsche Bank highlighted that weekly jobless claims climbed to their highest level in four months, complicating the outlook for Federal Reserve policy. Investors continue to weigh the possibility that the central bank may need to tighten monetary policy further before the end of the year.

    Technology stocks also remained under scrutiny after Oracle (NYSE:ORCL) surged following a spending outlook that significantly exceeded market expectations, prompting renewed questions about how the sector will fund the enormous expansion of artificial intelligence infrastructure.

    SpaceX Prepares for Largest IPO on Record

    SpaceX (NASDAQ:SPCX) is set to begin trading publicly on Friday in what is expected to be the largest initial public offering ever completed.

    The aerospace company confirmed a listing price of $135 per share and the sale of more than 555 million shares, valuing the business at approximately $1.77 trillion.

    The offering is projected to raise around $75 billion, comfortably surpassing the previous IPO records established by Saudi Aramco in 2019 and Alibaba in 2014.

    According to estimates cited by The New York Times, the amount being raised by SpaceX exceeds the combined proceeds generated by all U.S. IPOs over the past two years.

    The flotation could also mark the beginning of a new wave of mega-listings. Artificial intelligence firms Anthropic and OpenAI have both reportedly submitted confidential filings for public offerings that could value each company at close to $1 trillion.

    Elon Musk, who founded SpaceX in 2002 and retains roughly half of the company’s equity, stands to see his wealth increase substantially if investor demand remains strong following the listing.

    Trump Signals Progress Toward Iran Agreement

    Market sentiment received an additional boost from comments by President Donald Trump, who indicated that negotiations with Iran were nearing completion and that a formal agreement could be signed within days.

    Speaking to reporters, Trump said the proposed arrangement would reopen the Strait of Hormuz and bring an end to restrictions affecting Iranian ports.

    “We just made a great settlement of the war with Iran, and we’re going to be subject to finalization of documents, which should get done over the next few days. We’ll probably have a signing, maybe in Europe,” Trump said.

    Later, during a virtual campaign event, he stated that “we ended the war with Iran today,” adding that Tehran had agreed “never to have a nuclear weapon.”

    Iran’s foreign ministry acknowledged that significant sections of a potential agreement were close to being finalised, according to remarks carried by Press TV. However, officials rejected suggestions that a final accord had already been signed and criticised what they described as “contradictory positions” from Washington that were creating “turbulence and disruption” in negotiations.

    Oil Prices Ease as Markets Anticipate Supply Recovery

    The possibility of a diplomatic breakthrough weighed on crude prices, although oil remains elevated compared with levels seen before the conflict erupted.

    By 03:27 ET, Brent crude futures had fallen 2.0% to $88.62 per barrel, while U.S. West Texas Intermediate crude futures were down 2.2% at $85.82 per barrel.

    The prospect of shipping traffic resuming through the Strait of Hormuz has reduced immediate concerns about global supply disruptions. Nevertheless, analysts warn that the market may continue to feel the effects of months of constrained energy flows.

    Analysts at ING noted: “[T]he legacy issue of this crisis has been the substantial loss of energy supplies and its inflationary shock sent around the world.”

    They added: “Unless oil starts shipping freely in the Strait of Hormuz very soon, our house call is that energy markets could move close to a tipping point in July. In turn, we would be wary about expecting much lower oil prices from current levels.”

    Adobe Shares Decline Following Executive Departure

    Adobe (NASDAQ:ADBE) delivered quarterly results that exceeded analyst expectations and raised its full-year revenue and earnings forecasts, supported by strong momentum in its artificial intelligence business.

    The company said annualised recurring revenue from AI-related products had tripled year-on-year.

    Despite the upbeat financial performance, Adobe shares fell more than 5% in after-hours trading after the company disclosed the departure of chief financial officer Dan Durn.

    Durn is scheduled to leave the company on June 15 to pursue another career opportunity. Steve Day, currently senior vice president of corporate finance, will assume the role of interim CFO.

    The move marks the second consecutive quarter in which Adobe has announced a major leadership transition. In March, the software group revealed that long-serving chief executive Shantanu Narayen would step down.

    Adobe, whose portfolio includes Photoshop and Premiere Pro, has been expanding aggressively into generative artificial intelligence through Adobe Firefly, its suite of AI-powered tools for creating images, video, audio and vector-based content.

  • Rolls-Royce Leads Aerospace Rally After Berenberg Upgrade Highlights Flight-Hour Strength

    Rolls-Royce Leads Aerospace Rally After Berenberg Upgrade Highlights Flight-Hour Strength

    Analyst Upgrade Drives Sector Gains

    Shares of Rolls-Royce Holdings (LSE:RR.), Safran (EU:SAF) and MTU Aero Engines (TG:MTX) moved sharply higher on Wednesday after Berenberg upgraded Rolls-Royce to “buy” from “hold” and increased its target price to 1,430p from 1,270p.

    The broker pointed to Rolls-Royce’s strong operational performance, highlighting the company’s relatively young engine fleet and industry-leading growth in flying hours despite the challenges posed by higher fuel prices following the U.S.-Iran conflict.

    By 05:10 ET (09:10 GMT), Rolls-Royce shares had climbed 4.55%, while Safran advanced 4.91% and MTU Aero Engines gained 3.71%.

    Berenberg maintained its “buy” recommendation on Safran with a €355 target price, while reiterating a “hold” rating on MTU and setting a €350 target compared with its 11 June closing price of €306.70.

    Rolls-Royce Outperforms Peers on Flight Activity

    According to Berenberg, Rolls-Royce recorded the strongest growth in engine flying hours among major European aerospace peers during the first five months of 2026.

    Using Cirium data, the broker calculated that programme-weighted, thrust-adjusted flying hours for Rolls-Royce engines increased 5% year-on-year between January and May. By comparison, Safran posted growth of 2%, while MTU experienced a 1% decline.

    “Rolls-Royce has the youngest engine fleet on a thrust-adjusted basis and has achieved the highest growth in flight hours ytd compared to European peers,” analysts said.

    Younger Fleet Supports Long-Term Growth

    Berenberg noted that Rolls-Royce’s fleet remains the youngest among the three manufacturers on a thrust-adjusted basis.

    The average age of Rolls-Royce’s adjusted fleet was estimated at 12 years, compared with 12.2 years for Safran and 14.5 years for MTU. Engines less than a decade old accounted for 51% of Rolls-Royce’s fleet, versus 43% for Safran and 35% for MTU.

    The broker believes this younger installed base supports stronger utilisation rates and longer-term growth opportunities.

    Widebody Exposure Provides Protection

    Rolls-Royce’s heavy exposure to widebody aircraft was also identified as a competitive advantage in the current environment.

    Widebody engines represented 92% of the company’s adjusted fleet, helping shield it from capacity reductions that have been more heavily concentrated among narrowbody aircraft operators.

    Berenberg’s review of more than 50 airlines indicated a 2.8% reduction in narrowbody capacity this year, compared with a 2.4% decline for widebody aircraft. The analysis was based on expectations that jet fuel prices could average $152 per barrel in 2026, representing a 69% increase year-on-year.

    Safran’s adjusted fleet had 22% exposure to widebody aircraft, while MTU’s exposure stood at 48%.

    Middle East Weakness Hits Competitors Harder

    The report also highlighted differing regional performance trends.

    MTU’s adjusted flying hours in the Middle East declined 23% year-to-date, compared with a 15% drop for Safran and a more modest 7% decrease for Rolls-Royce.

    The findings suggest Rolls-Royce has been more resilient to disruption in one of the aviation industry’s most important long-haul markets.

    Profit Forecasts Cut Across Airline Industry

    The aerospace sector continues to navigate a difficult backdrop as airlines grapple with higher operating costs.

    The International Air Transport Association (IATA) recently reduced its forecast for global airline net profit in 2026 to $23 billion from $41 billion, representing a 44% downgrade. The industry generated an estimated $45 billion profit in 2025.

    The revised outlook assumes jet fuel prices rise by 69% and also reflects expectations of weaker growth in airline capacity. IATA lowered its forecast for available seat kilometre growth in 2026 by 3.1 percentage points to 1.6%.

    Middle Eastern airlines are now expected to post a net loss under the organisation’s latest projections.

    Berenberg Raises Rolls-Royce Earnings Expectations

    Reflecting its confidence in the company’s outlook, Berenberg increased its 2026 free cash flow forecast for Rolls-Royce by 3% to £3.77 billion.

    The broker also raised its estimate for underlying EBIT by 2% to £4.05 billion.

    Berenberg expects the group’s Defence and Power Systems divisions to contribute approximately 43% of total EBIT in 2026, providing additional diversification beyond its civil aerospace operations.

  • Market Open: Flutter Exits London, Barclays Buys GoHenry

    Market Open: Flutter Exits London, Barclays Buys GoHenry

    Markets mixed as Flutter plans a London exit and Barclays acquires GoHenry. Brent crude, gold and Bitcoin all move lower.

    Market Overview

    UK markets were mixed at the open, with the FTSE 100 slipping 0.12 per cent to 10,390.07, while the FTSE 250 gained 1.28 per cent. Across Europe, sentiment improved as hopes for a US-Iran agreement helped lift risk appetite, with the CAC 40 rising 0.48 per cent and the DAX adding 0.06 per cent. In the United States, overnight trading was weaker, with the Nasdaq falling 0.88 per cent and the S&P 500 declining 0.23 per cent. Investors also weighed softer UK economic data alongside improving geopolitical sentiment.

    Commodity markets reflected easing geopolitical concerns. Brent crude moved lower as hopes for reduced tensions in the Middle East weighed on energy prices, while copper and gold also declined. Natural gas edged higher. Sterling strengthened against the euro and US dollar but weakened against the yen, Swiss franc and Australian dollar. Bitcoin traded lower against the pound as broader risk assets remained mixed.

    Market Numbers

    FTSE 100: Down (-0.12%), 10,390.07
    CAC40: Up (0.48%), 8,200.800
    DAX: Up (0.06%), 24,209.71
    NASDAQ: Down (-0.88%), 29,263.6
    S&P 500: Down (-0.23%), 7,373.9

    In the Headlines

    London Exit Plan – Flutter Entertainment (LSE:FLTR)

    Flutter Entertainment plans to delist from the London Stock Exchange while retaining its primary listing in New York. The move reflects the company’s increasing focus on the US market and highlights the ongoing challenge facing London in retaining major listed companies.

    Youth Banking Expansion – Barclays (LSE:BARC)

    Barclays has agreed to acquire children’s debit card and money management app GoHenry from Acorns. The deal is intended to strengthen Barclays’ youth banking proposition and expand its reach among affluent families.

    Currencies (vs GBP)

    USD: Down (-0.14%), $1.3394
    CHF: Up (0.08%), Fr.1.06726
    EUR: Down (-0.04%), €1.1581
    JPY: Up (0.09%), ¥214.800
    AUD: Up (0.23%), $1.906600
    Bitcoin (BTC/GBP): Down (-0.82%), £47,006.7

    Commodities

    Copper: Down (-0.36%), 6.41327
    Gold: Down (-0.85%), 4,175.23
    Brent Crude: Down (-0.89%), 87.735
    Natural Gas: Up (0.03%), 3.072

  • European Markets Climb to Two-Week Highs on Growing Optimism Over U.S.-Iran Agreement: DAX, CAC, FTSE100

    European Markets Climb to Two-Week Highs on Growing Optimism Over U.S.-Iran Agreement: DAX, CAC, FTSE100

    Stocks Rally Across the Region

    European equities opened strongly higher on Friday after investors received what many viewed as the strongest indication so far that a diplomatic agreement between the United States and Iran could be approaching.

    The pan-European STOXX 600 advanced 1%, reaching its highest level in two weeks and putting the index on track for its strongest daily performance in more than a fortnight. Germany’s DAX rose 1.5%, France’s CAC 40 gained 1.2%, and London’s FTSE 100 added 0.8%. Italy’s FTSE MIB climbed 1.2%, setting a fresh all-time high.

    Airlines Benefit from Falling Oil Prices

    Airline shares were among the biggest beneficiaries of the decline in crude oil prices, as lower fuel costs improve profit prospects for the sector.

    Air France-KLM (EU:AF) surged 5.8%, while British Airways owner International Consolidated Airlines Group (LSE:IAG) gained 4.5%. Wizz Air Holdings (LSE:WIZZ) rose 6%, and Deutsche Lufthansa (TG:LHA) advanced 4.6%.

    Peace Hopes Push Oil to Two-Month Lows

    Crude oil prices fell to their lowest levels in two months after U.S. President Donald Trump suggested that a landmark peace agreement could be signed in Europe as early as this weekend.

    Investors interpreted the comments as the most concrete evidence to date of progress towards a diplomatic resolution, prompting broad-based gains across equity markets.

    However, geopolitical risks have not disappeared entirely. Reports indicated that Iran continues to target vessels in the Strait of Hormuz, preventing investors from becoming overly complacent.

    Markets Balance Geopolitics and Central Bank Policy

    The rally comes just one day after the European Central Bank delivered its first interest-rate increase in nearly three years in response to inflationary pressures linked to the conflict.

    The move capped a turbulent week for investors, who have had to navigate a stronger-than-expected U.S. employment report, a more hawkish ECB stance and rapidly changing developments in the Middle East, while also assessing the likely direction of future Federal Reserve policy.

    The STOXX 600, which is particularly sensitive to tensions in the Middle East because of Europe’s dependence on imported energy, had been heading towards a weekly decline of around 0.2%. Friday’s gains, however, raised the possibility of ending the week in positive territory.

    Analysts Warn Volatility May Persist

    Analysts at HSBC Asset Management noted that markets remain exposed to multiple sources of uncertainty despite improving sentiment.

    “The global economy faces a complex set of supply shocks but markets have shaken off geopolitical worries, helped by strong corporate profits. The confusing macro landscape means episodic volatility is to be expected,” they said.

    Eramet and Fraport Among Top Movers

    Elsewhere in the market, Eramet (EU:ERA) jumped almost 6% after the Financial Times reported that a U.S.-backed investment fund was exploring a potential stake in the company.

    Airport operator Fraport (TG:FRA) gained 5% after reporting stronger passenger traffic figures for May.

  • European Airline Stocks Climb as Oil Prices Tumble on Iran Ceasefire Optimism

    European Airline Stocks Climb as Oil Prices Tumble on Iran Ceasefire Optimism

    Lower Fuel Costs Lift Airline Sector

    European airline shares surged on Friday after crude oil prices fell sharply, driven by renewed optimism over a potential agreement between the United States and Iran.

    Investor sentiment improved after U.S. President Donald Trump stated that the United States had “ended the war with Iran,” referring to a proposed memorandum of understanding that would reopen the Strait of Hormuz and include Iranian commitments not to pursue nuclear weapons.

    By 10:28 a.m., Brent crude had fallen 4.4% to $86.39 per barrel, while WTI crude dropped 4.5% to $83.77, leaving both benchmarks at their lowest levels in almost two months.

    Airline Shares Rally Across Europe

    The decline in fuel prices provided a significant boost to airline stocks, which are highly sensitive to changes in energy costs.

    Shares across the sector gained between 4.1% and 8.5%, with Air France-KLM (EU:AF) leading the advances. EasyJet (LSE:EZJ) posted the smallest gain among the major carriers.

    Other airlines participating in the rally included Ryanair (LSE:0A2U), Lufthansa (TG:LHA), Wizz Air (LSE:WIZZ), Finnair (TG:FAI0), IAG (LSE:IAG) and Norwegian Air Shuttle (TG:NWC).

    Proposed Agreement Could Reopen Strait of Hormuz

    According to reports cited by Axios, the proposed framework would allow shipping traffic to resume through the Strait of Hormuz without transit charges, while extending the existing ceasefire by 60 days, including in Lebanon.

    The agreement would also provide sanctions relief for Iran in exchange for compliance with agreed commitments, while the United States would lift its naval blockade.

    Trump indicated that Vice President JD Vance could attend a signing ceremony in Europe as early as this weekend if negotiations progress as expected.

    Iran Remains Cautious

    Speaking during a telephone campaign event supporting Alabama Senate candidate Barry Moore, Trump said: “We have reached a great agreement. There will be no nuclear weapons. People will begin to go home very soon. It’s practically, practically finalized. We got everything we wanted.”

    However, Iranian officials appeared more cautious. The semi-official Fars news agency reported that negotiators had not yet approved the text of any agreement, citing an unnamed source close to the discussions.

    Iran was also absent from the list of countries that Trump said had already endorsed the proposed framework, leaving uncertainty over whether a final deal will ultimately be reached.

  • French Luxury and Banking Stocks Advance as Inflation Reaches Two-Year High

    French Luxury and Banking Stocks Advance as Inflation Reaches Two-Year High

    Inflation Data Lifts Key French Sectors

    French luxury goods and banking shares moved higher on Friday after new economic data showed inflation accelerated to its strongest level in more than two years.

    Among luxury stocks, Hermes (EU:RMS), LVMH (EU:MC) and Kering (EU:KER) gained between 2.5% and 4%. Banking shares also performed strongly, with BNP Paribas (EU:BNP), Société Générale (EU:GLE) and Crédit Agricole (LSE:ACA) rising between 1.4% and 3.6%.

    Higher Prices Support Banks and Luxury Brands

    Investors often view both sectors as beneficiaries of rising inflation.

    For banks, stronger inflation can reinforce expectations that interest rates will remain elevated for longer, supporting lending margins and profitability.

    Luxury goods companies have historically shown an ability to pass higher costs on to consumers through price increases without significantly affecting demand, particularly among affluent customers. This pricing power can help protect earnings during inflationary periods.

    French Inflation Accelerates Further

    Data released by France’s statistics agency INSEE confirmed that consumer prices increased by 2.8% year-on-year in May, matching the preliminary estimate published previously.

    The reading marked the fastest pace of inflation since February 2024 and represented a further acceleration from recent months.

    The European Union-harmonised inflation measure also continued to trend higher, following an annual increase of 2.5% in April.

    Core Inflation and Food Prices Move Higher

    Core inflation, which excludes more volatile components such as energy and certain food items, rose to 1.5% in May from 1.2% in April.

    On a month-to-month basis, consumer prices increased by 0.1%, slowing considerably from the 1.0% rise recorded in April.

    Energy prices climbed 0.6% during the month, driven largely by a 10.3% increase in gas prices. INSEE noted that part of this increase was offset by lower petroleum product prices.

    Food inflation also edged higher, with fresh produce contributing most significantly to the monthly increase.

  • FTSE 100 Advances as Iran Deal Optimism Eases Market Concerns Despite UK GDP Setback

    FTSE 100 Advances as Iran Deal Optimism Eases Market Concerns Despite UK GDP Setback

    European Markets Rally on Diplomatic Progress

    UK equities moved higher on Friday as investors focused on the prospect of a diplomatic breakthrough between the United States and Iran, helping offset concerns about a softer-than-expected monthly UK economic reading.

    The FTSE 100 gained 0.85% in early trading, while Germany’s DAX rose 1.33% and France’s CAC 40 advanced 1.47%. Sterling slipped 0.17% against the US dollar to $1.3394.

    Commodity markets reflected improving risk sentiment, with Brent crude falling 1.96% to $88.61 a barrel and WTI crude declining 1.79% to $86.13 as fears over potential supply disruption eased. Gold also weakened, falling 0.76% to $4,179.15 per troy ounce.

    UK Economy Records Mixed Growth Picture

    Fresh data from the Office for National Statistics showed the UK economy expanded by 0.7% in the three months to April 2026, marking a fifth consecutive period of rolling quarterly growth and accelerating from 0.6% in the previous three-month period.

    However, monthly GDP fell by 0.1% in April, representing the first contraction since August 2025. The decline was driven primarily by a 0.2% reduction in services activity, which outweighed a modest 0.1% increase in construction output.

    The ONS indicated that some of the weakness may have been linked to disruption caused by the Middle East conflict, citing reduced activity across manufacturing, wholesale trade, travel-related businesses and sporting events.

    Markets React to Signs of U.S.-Iran Agreement

    Investor sentiment improved after U.S. President Donald Trump suggested that a preliminary agreement between Washington and Tehran could be finalised within days.

    Trump said the United States had effectively “ended the war with Iran” and described the proposed agreement as “a very strong memorandum of understanding that is a little conceptual.”

    “We made a great deal. There’ll be no nuclear weapons. People will start coming home very soon. It’s pretty much, pretty much completed. We got everything we wanted,” Trump said during a tele-rally event.

    According to reports, the proposed framework would extend the existing ceasefire, reopen the Strait of Hormuz to shipping traffic and provide sanctions relief to Iran in exchange for compliance with agreed conditions.

    However, uncertainty remains. Iran’s semi-official Fars news agency reported that negotiators had not yet approved any formal agreement, highlighting continuing questions over whether a deal will ultimately be signed.

    Flutter and McBride Among Corporate Movers

    In company news, Flutter Entertainment (LSE:FLTR) announced plans to cancel its London Stock Exchange listing, with trading set to cease on 3 August 2026. The company said it had concluded that concentrating liquidity on the New York Stock Exchange, where its shares trade under the ticker FLUT, would be in the best interests of shareholders.

    Meanwhile, McBride (LSE:MCB) warned that higher costs for petrochemical-based and energy-intensive raw materials, driven by the Middle East conflict, are expected to weigh on profitability. The household cleaning products manufacturer now expects adjusted EBITA for fiscal 2026 and fiscal 2027 to come in between 5% and 10% below current analyst expectations, although it anticipates performance will begin to recover from the second quarter of fiscal 2027 onwards.

    Investors Monitor Geopolitics and Economic Data

    The combination of improving geopolitical sentiment and resilient longer-term economic growth helped support equity markets despite weaker monthly GDP data. Investors are likely to remain focused on developments surrounding any potential U.S.-Iran agreement, as well as its implications for oil prices, inflation and broader market sentiment in the weeks ahead.

  • UK Energy Shares Slide as Oil Prices Retreat on Renewed Iran-U.S. Deal Optimism

    UK Energy Shares Slide as Oil Prices Retreat on Renewed Iran-U.S. Deal Optimism

    Oil Market Falls on Prospects of Diplomatic Breakthrough

    UK-listed energy stocks came under pressure on Friday after crude oil prices dropped sharply amid growing expectations that the United States and Iran could reach a peace agreement in the coming days.

    WTI crude for July delivery fell around 4% to $84.20 per barrel, while Brent crude for August delivery declined 3.7% to $87.07 per barrel. The move reflected easing concerns over potential supply disruptions in the Middle East as investors reacted to comments from U.S. President Donald Trump suggesting a deal could be signed as early as this weekend.

    Major Energy Stocks Move Lower

    The decline in oil prices weighed heavily on the London energy sector.

    Shares in BP (LSE:BP.) fell 3.7%, while Shell (LSE:SHEL) dropped 2.6% during morning trading. Elsewhere, Diversified Energy (LSE:DEC) and Ithaca Energy (LSE:ITH) each lost more than 4%, while Harbour Energy (LSE:HBR) declined 3.8%.

    Investors typically view lower oil prices as a headwind for energy producers because weaker commodity prices can reduce future revenues and profitability.

    Trump Signals Agreement Could Be Near

    Speaking from the Oval Office on Thursday, Trump said he expected an agreement with Iran to be reached within days and suggested that the Strait of Hormuz could reopen fully once a deal is completed.

    “The strait will officially open as soon as we sign, which could be soon, very soon, maybe over the weekend in Europe,” he said.

    Trump also indicated that U.S. Vice President JD Vance would attend any signing ceremony and revealed that he had cancelled a planned round of military strikes against Iran after negotiations had advanced significantly.

    According to the president, discussions had been “brought to the highest level of Iranian leadership and approved.”

    Uncertainty Remains Around Negotiations

    If completed, an agreement would represent the most significant diplomatic breakthrough since the conflict began three months ago.

    However, conflicting signals continue to emerge from both sides. When asked whether Iran’s Supreme Leader, Ayatollah Mojtaba Khamenei, had personally approved an agreement, Trump responded: “I understand the answer is yes.”

    Iranian officials appeared to challenge that assessment. State-affiliated media outlet Fars reported that Tehran had not approved any draft memorandum of understanding with Washington.

    The mixed messaging has left markets cautious, particularly given that similar claims of imminent progress have been made since March without producing a final agreement. The two countries have also continued exchanging strikes as recently as this week despite an earlier ceasefire arrangement.

    More About the Sector

    The sharp reaction across UK energy stocks highlights the sensitivity of the sector to geopolitical developments and movements in crude oil prices. Companies such as BP, Shell, Harbour Energy, Diversified Energy and Ithaca Energy derive a significant portion of their earnings from oil and gas production, making their share prices closely linked to changes in commodity market expectations. A sustained easing of tensions in the Middle East could reduce the geopolitical risk premium embedded in oil prices, although uncertainty surrounding negotiations continues to support market volatility.