Author: Fiona Craig

European share markets traded cautiously on Thursday, with investors keeping a close eye on escalating developments between the United States and Venezuela, while also positioning ahead of key U.S. employment data that could influence expectations for Federal Reserve policy.

Sentiment was weighed down after the U.S. seized two oil tankers flying Russian flags and outlined intentions to exert long-term control over future Venezuelan oil sales.

Major indices were modestly weaker, with the UK’s FTSE 100 down 0.3%, Germany’s DAX lower by 0.2% and France’s CAC 40 slipping 0.1%.

In London, Tesco (LSE:TSCO) shares fell sharply despite the retailer guiding for full-year profit to land at the upper end of its previous range. Associated British Foods (LSE:ABF) also moved notably lower after issuing a more cautious profit outlook.

French catering group Sodexo (EU:SW) came under pressure as it reported a 1.5% decline in organic sales in North America during the first quarter.

By contrast, defence stocks across the region rallied strongly after U.S. President Donald Trump called for a significant increase in American defence spending.

Shares in Pharming Group (EU:PHARM) surged after the company forecast 2025 revenue ahead of previous guidance. UK retailer Marks and Spencer (LSE:MKS) also advanced, supported by solid food sales growth over the crucial Christmas trading period.

In Germany, wind turbine manufacturer Nordex (TG:NDX1) jumped after announcing new orders in Spain with a combined capacity of 245.8 megawatts.

Gold prices slipped further on Thursday during Asian hours, extending a pullback from earlier weekly gains as a stronger U.S. dollar dampened demand for the metal ahead of critical U.S. employment data.

By 06:40 GMT, spot gold was down 0.5% at $4,436.62 per ounce, while U.S. gold futures fell 0.4% to $4,442.86 per ounce, with investors taking profits after the recent surge. The firmer dollar continued to pressure bullion by making it more expensive for buyers using other currencies. The U.S. Dollar Index was steady after climbing for two straight sessions.

Market participants remained cautious ahead of Friday’s U.S. nonfarm payrolls report, a closely watched indicator that could influence expectations around Federal Reserve interest rate policy. Softer labour market data could strengthen the case for rate cuts, potentially improving gold’s appeal in a lower-yield environment.

U.S.–Venezuela tensions provide partial support

Geopolitical risks helped limit gold’s downside, as ongoing tensions between Washington and Caracas continued to underpin some safe-haven demand.

On Wednesday, U.S. forces seized two oil tankers linked to Venezuelan crude shipments, including one sailing under a Russian flag, in what marked a further escalation of enforcement actions targeting Venezuela’s oil exports. U.S. officials said the move was intended to disrupt sanctioned oil flows that support the Venezuelan government while bypassing U.S. restrictions.

The seizure of a vessel flying a Russian flag drew sharp criticism from Moscow, which reportedly described the action as “blatant piracy” and demanded the return of Russian nationals among the crew.

For gold markets, the flare-up in U.S.–Venezuela tensions offered some support to safe-haven buying, even as investors awaited clearer direction from Friday’s employment figures.

Broader metals market under pressure

Elsewhere in the metals complex, prices were broadly lower on Thursday.

Silver fell 2.3% to $76.32 per ounce, while platinum dropped 4.3% to $2,207.60 per ounce.

In base metals, benchmark copper futures on the London Metal Exchange declined 0.3% to $12,854.20 per tonne, while U.S. copper futures were little changed at $5.85 per pound.

U.S. equity futures traded lower on Thursday as investors positioned cautiously ahead of this week’s key U.S. employment data and continued to monitor geopolitical developments. Oil prices steadied after recent declines, Samsung delivered an upbeat profit outlook for the fourth quarter, and Bitcoin retreated below the $91,000 threshold.

U.S. futures point lower

Early trading saw U.S. stock futures edge down, reflecting a risk-averse tone as markets awaited the upcoming nonfarm payrolls report and assessed broader global uncertainties.

At 03:05 ET (08:05 GMT), Dow futures were lower by 116 points, or 0.2%, S&P 500 futures slipped 13 points, or 0.2%, and Nasdaq 100 futures declined by 81 points, or 0.3%.

The prior session on Wall Street ended mixed. The Nasdaq Composite advanced, supported by gains in heavyweight technology stocks including Nvidia (NASDAQ:NVDA) and Alphabet (NASDAQ:GOOG). In contrast, weakness in financial and energy shares weighed on the S&P 500 and the Dow Jones Industrial Average.

Markets also reacted to a series of policy statements from U.S. President Donald Trump. These included proposals to restrict institutional purchases of single-family homes, prohibit defence contractors from distributing dividends or conducting share buybacks, and increase U.S. defence spending by more than 50% to $1.5 trillion by 2027. It remains uncertain whether such measures could be enacted without congressional approval.

Analysts at Vital Knowledge noted that “The housing and defense dividend/buyback announcements weighed on investor sentiment as they were just the latest examples of the Trump 2.0 White House intervening in the economy in an unprecedented fashion.”

Oil prices stabilise

Crude prices edged higher but pared earlier gains after a Wall Street Journal report suggested the U.S. may be seeking long-term control over Venezuelan oil assets.

Oil markets found some support after two consecutive sessions of declines, amid concerns that global oversupply could worsen if Venezuelan production increases. Earlier in the week, Trump said Venezuela would hand over between 30 million and 50 million barrels of oil to Washington—worth up to $3 billion—shortly after U.S. forces captured Venezuelan President Nicolas Maduro.

Additional support came from data showing a larger-than-expected weekly drop in U.S. crude inventories, while ongoing hostilities between Russia and Ukraine helped maintain a risk premium.

By 23:01 ET (04:01 GMT), Brent crude futures were up 0.2% at $60.07 per barrel, while West Texas Intermediate crude futures also rose 0.2% to $56.03 per barrel. Both benchmarks had fallen by more than 1% in each of the previous two sessions.

Samsung forecasts sharp Q4 earnings growth

Samsung Electronics (USOTC:SSNHZ) issued a stronger-than-anticipated profit forecast for the fourth quarter, benefiting from rising memory chip prices driven by artificial intelligence-related demand and supply constraints.

The company projected operating profit of 20 trillion won ($13.82 billion) for the October–December period, exceeding Reuters/LSEG expectations of 18 trillion won and more than tripling the 6.49 trillion won recorded a year earlier. Quarterly revenue is expected to reach approximately 93 trillion won, up from 75.79 trillion won in the same period last year.

The improved outlook was largely attributed to surging memory prices, as AI-focused firms absorbed a significant share of Samsung’s output, tightening supply.

Chinese chip shares rise on Nvidia report

Chinese semiconductor stocks moved higher following reports that Beijing has instructed some domestic technology companies to pause orders for Nvidia’s H200 artificial intelligence chips.

The move appears to be part of a broader review of access to the H200 and the conditions under which it may be supplied, reflecting efforts to encourage domestic chip development while managing reliance on foreign technology.

Several local AI and chipmakers gained in early trading. Hong Kong-listed Semiconductor Manufacturing International Corp rose more than 0.3%, Hua Hong Semiconductor Ltd jumped over 2.6%, and Shanghai-listed Cambricon Technologies advanced by more than 3.3%.

Bitcoin retreats below $91,000

Bitcoin declined during European trading hours, extending a pullback from its early-year rally as risk appetite weakened amid heightened geopolitical tensions in Latin America and Asia.

Caution ahead of Friday’s U.S. nonfarm payrolls report also limited speculative activity in crypto markets, as investors sought clearer signals on the strength of the U.S. labour market and its implications for Federal Reserve policy.

Sentiment was further dampened by uncertainty surrounding crypto treasury companies, particularly Strategy Inc., one of the largest corporate holders of Bitcoin. The company, down nearly 50% so far in 2025, found only limited relief after MSCI said earlier this week that it would not proceed with plans to remove digital asset treasury firms from its indices.

Bitcoin was last down 2.4% at $90,449.9 by 03:35 ET.

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.