Category: Market News

Saint-Gobain (LSE:SGO) has expanded its footprint in Indonesia’s construction chemicals market by establishing a joint venture with Indocement Tunggal Prakarsa to acquire Indocement’s mortars operations. The acquired business runs three production lines under the Tiga Roda brand and is estimated to have generated around €20 million in revenue in 2025.

Under the agreement, the joint venture is owned 60% by Saint-Gobain and 40% by Indocement. The combination brings together Tiga Roda’s established position in white skim coat finishing products with Saint-Gobain’s existing Indonesian mortars platform, Cipta Mortar Utama, which operates eight production lines and reaches roughly 30,000 points of sale. The partnership will also benefit from Saint-Gobain’s broader GCP and FOSROC construction chemicals portfolio, supporting faster growth in what the group views as a high-potential Indonesian mortars market. The move aligns with Saint-Gobain’s “Lead & Grow” strategy and further strengthens its exposure to fast-growing construction chemicals segments globally.

More about Compagnie de Saint Gobain

Compagnie de Saint Gobain is a global leader in light and sustainable construction, designing, manufacturing and distributing materials and services for construction and industrial applications. The group offers integrated solutions for building renovation, light construction and the decarbonisation of construction and industry. Operating in 80 countries with more than 161,000 employees, Saint-Gobain reported sales of €46.6 billion in 2024 and has committed to achieving net zero carbon emissions by 2050.

Falcon Oil & Gas Ltd. (LSE:FOG) has obtained shareholder approval at a general meeting held in Brisbane for the disposal of its 98.1% interest in its Australian subsidiary to Tamboran Resources Corporation. The decision clears a key hurdle in Tamboran’s plan to consolidate Falcon’s Australian assets.

The transaction involves the sale of Falcon’s majority holding in Falcon Oil & Gas Australia Limited and forms part of a broader arrangement under which Tamboran aims to acquire all of Falcon’s subsidiary businesses. Following the approval, Tamboran’s enlarged ownership position will allow it to proceed with the compulsory acquisition of the remaining minority shares in the Australian unit on terms that are no less favourable than those agreed with Falcon. With this condition now satisfied, the parties remain on course to complete the overall transaction in the first quarter of the year.

More about Falcon Oil & Gas

Falcon Oil & Gas Ltd. is an international oil and gas exploration and development company focused on unconventional resources. Its asset base is primarily located in Australia, South Africa and Hungary. The company is incorporated in British Columbia, Canada, and has its headquarters in Dublin, Ireland.

Hays plc (LSE:HAS) has confirmed that Chief Executive Officer Dirk Hahn has returned to work following a brief period of medical leave after undergoing surgery in November. His return marks the restoration of normal executive leadership at the recruitment group.

While Hahn was absent, Group Chair Michael Findlay assumed the role of Executive Chair to ensure business continuity and oversee the company’s strategic and commercial priorities. With Hahn now back in post, Findlay will revert to his previous position as Non-Executive Chair, indicating that the interim leadership arrangement caused little disruption to Hays’ operations or strategic direction.

Hays’ overall outlook continues to be weighed down by weaker financial performance and unfavourable technical indicators. Ongoing revenue declines and profitability pressures remain key challenges, while technical analysis points to a bearish trend in the shares. Valuation metrics, including a negative price-to-earnings ratio, further detract from sentiment. Although recent corporate developments reflect confidence from management, they have not materially shifted the broader assessment.

More about Hays plc

Hays plc is a global specialist recruitment group operating across the professional staffing market. The company focuses on placing skilled and qualified candidates in a wide range of sectors, supporting corporate and institutional clients around the world.

Balfour Beatty (LSE:BBY) has finalised the disposal of ten UK-based assets from its Infrastructure Investments portfolio to Equitix, securing total proceeds of £87 million and delivering a profit of £7 million on the transaction.

The assets sold comprise three offshore transmission owner projects, five street lighting schemes, a biomass facility and a road concession. According to the company, the sale price was above the directors’ valuation as of June 2025. The transaction supports Balfour Beatty’s capital recycling strategy, under which mature, operational assets are sold to release value while funding new infrastructure investments. This approach underlines the group’s continued focus on operating as an active infrastructure investor and long-term operator.

Balfour Beatty’s outlook continues to be supported by robust financial performance and constructive technical indicators. Market sentiment has also been bolstered by the group’s ongoing share buyback programme and positive commentary from recent earnings updates. That said, the company’s comparatively elevated price-to-earnings ratio suggests investors may wish to remain mindful of valuation levels.

More about Balfour Beatty

Balfour Beatty is a major international infrastructure group involved in the financing, development, construction, maintenance and operation of critical infrastructure assets. Employing around 27,000 people and drawing on more than 100 years of experience, the company delivers large-scale projects across sectors such as energy, transport and cultural infrastructure. Through its investment platforms in the UK and the US, Balfour Beatty is also a significant investor in public-private partnership projects, including student accommodation, housing and other essential social infrastructure.

Here we are on the last Monday of the year. While the S&P 500, NASDAQ, Dow Jones, and even gold (XAUUSD) have all posted solid gains since the start of 2025, calling the year “calm” would be a stretch — especially on the geopolitical front. There are some signs of easing tensions, but it’s far too early to declare a new era of peace.

For instance, according to CNN, the Israeli prime minister will meet with Trump to request approval for another operation in Gaza. Meanwhile, there are signs of progress in the conflict between Russia and Ukraine, which has led to a brief decline in precious metals, but the most difficult part is yet to come.

Markets, however, don’t seem too worried about the uncertain prospects for geopolitical de-escalation. Risk assets continue to trend upwards, and according to investment bank forecasts, optimism appears poised to persist into next year. The average year-end 2026 target for the S&P 500 among major strategists stands at 7,555. 

One of the key drivers is expected to be a still-strong economy, which supports corporate profits.

In this regard, in the third quarter, US GDP grew by 1.1% quarter-on-quarter, 2.3% year-on-year, with consumer spending contributing 2.4 percentage points to growth, led by services. The challenge is that, with such strength, the Fed has less incentive to cut rates, so Treasury yields are not falling rapidly.

Looking at this week, the holiday schedule — including the New Year’s closure — means things are likely to be quiet. The main focus will be on November’s housing market data, the release of the minutes from the latest Fed meeting, and weekly jobless claims – with the latter two crucial for understanding future rate moves.

Looking ahead to this week, given the holiday calendar, things are likely to be quiet. Attention will mainly focus on November’s real estate market data, the release of the minutes from the Fed’s latest meeting, and weekly unemployment claims, with the latter two being key to understanding future interest rate movements.

If the situation continues to evolve according to a more positive scenario, i.e., if the labor market deteriorates but not at a rapid pace, it is unlikely that the regulator will rush to lower interest rates. For gold, in particular, this may not be the best news, and the opposite could happen with the dollar index.

Alongside U.S. macroeconomic data, which did come as a surprise, particularly on the inflation front, as CPI undershot expectations and fell back to levels last seen in March 2021 (consensus had forecast core CPI at 3.0%, while the actual reading came in at 2.6%), last week was packed with central bank meetings. 

The most closely watched one was that of the Bank of Japan. The concern was that further monetary tightening could disrupt the yen carry trade, potentially triggering margin calls and forced selling — similar to the turmoil seen last July, when the BOJ unexpectedly raised rates by 15 basis points to 0.25%, renewing volatility in USD JPY.

In practice, however, those fears haven’t materialized — at least not yet.

After the Japanese central bank raised its official interest rate from 0.5% to 0.75% and signaled that further increases remain possible as long as economic conditions remain stable, the yield on 10-year Japanese government bonds rose above 2%, the yen weakened to around 157 per dollar, and the Nikkei 225 rebounded.

In the United States, markets remained relatively calm. 

The S&P 500 ended the week largely unchanged (+0.1%), while the Nasdaq rose 0.5%, despite ongoing concerns over high valuations in the tech sector. The muted reaction suggests that markets had already priced in the possibility of a rate hike, so much of the adjustment had already taken place.

Now, even if some downward pressure emerges in the short term, its overall impact is likely to be limited. This is because, with each additional rate hike by the Bank of Japan, the adverse effect on markets tends to fade as the yen carry trade loses its appeal, which, in theory, should reduce the risk of large-scale forced selling.

Elsewhere, the Bank of England cut its policy rate by 25 basis points to 3.75%, keeping the door open for further easing. At the same time, the European Central Bank held its deposit rate at 2% and signaled that no additional rate cuts are expected in 2026, which helped drive a rise in the EUR USD pair.

Financial markets showed a mixed tone on Friday as investors balanced encouraging US inflation data against disappointing signals from Nike (NYSE:NKE), a surprise tightening move by the Bank of Japan and a major new financial commitment from the European Union to support Ukraine.

US futures edge higher as softer inflation offsets Nike concerns

US equity futures traded modestly higher, extending Thursday’s rebound after weaker-than-expected inflation data bolstered expectations that the Federal Reserve may pursue a more accommodative policy stance next year. Gains, however, were capped by sharp losses in Nike shares.

By 03:30 ET, futures on the S&P 500 were up 0.3%, Nasdaq 100 futures rose 0.4% and Dow Jones futures added around 0.1%.

Wall Street closed higher in the previous session, ending a four-day losing streak, after inflation figures eased concerns about persistent price pressures. Despite the bounce, US indices remain on track for weekly declines, with the S&P 500 and Dow Jones Industrial Average both down close to 1%, while the Nasdaq Composite has also slipped about 0.8% so far this week.

Attention later in the session will turn to the University of Michigan’s consumer sentiment survey and November existing home sales, as investors look for further clues on the Fed’s policy trajectory into 2026.

Nike remains in focus after its stock dropped sharply in premarket trading. The athletic apparel group reported another contraction in sales from its Greater China segment during its fiscal second quarter, marking the sixth consecutive quarterly decline in the region.

Addressing the issue during the post-earnings call, CEO Elliott Hill said “it’s clear we need to reset our approach to the China marketplace,” which accounts for roughly 15% of group revenue.

EU leaders approve major loan package for Ukraine

European Union leaders have agreed to provide €90 billion ($105 billion) in financial support to Ukraine over the next two years, opting to fund the package through joint borrowing rather than drawing on frozen Russian assets.

The bloc had previously debated whether to deploy approximately €210 billion in immobilised Russian funds, most of which are held in Belgium, to back a reparations-style loan. Ultimately, leaders chose a collective borrowing approach supported by the EU budget.

“Ukraine will only repay this loan once Russia pays reparations,” EU Council President Antonio Costa said on Friday. “The only way forward is a ceasefire and a negotiated peace. Our political and financial support to Ukraine will not falter.”

The agreement is intended to provide Kyiv with greater financial certainty, while reinforcing Europe’s influence in US-led diplomatic efforts aimed at ending the conflict.

Ukrainian President Volodymyr Zelenskyy welcomed the decision, saying, “I am grateful to all leaders of the European Union for the European Council’s decision,” and stressing that it is vital that “Russian assets remain immobilized and that Ukraine has received a financial security guarantee for the coming years.”

Bank of Japan raises rates to highest level in decades

The Bank of Japan increased interest rates earlier on Friday, following guidance it had previously signalled, and indicated that further tightening remains possible if economic momentum and inflation trends continue.

The central bank lifted its short-term policy rate from 0.5% to 0.75%, the highest level since 1995, marking its second rate increase of the year after a similar move in January.

The BOJ said it expects Japanese companies to continue lifting wages in 2026 alongside improving corporate profitability. With labour market conditions expected to remain tight, policymakers said it is “highly likely” that wages and inflation will rise at a moderate pace.

Despite the hike, the bank emphasised that real interest rates remain “significantly negative” and that financial conditions are still broadly supportive of economic growth. It added that it stands ready to raise rates further and gradually scale back monetary stimulus if the economy evolves in line with its forecasts.

Trump signs order to accelerate return to the moon

US President Donald Trump has signed an executive order aimed at returning American astronauts to the moon by 2028 and laying the groundwork for a permanent lunar presence in the following years.

In the order, Trump said the US must pursue a space policy that advances national security objectives and “lay the foundation for a new space age.”

The directive places NASA’s Artemis programme at the centre of these efforts, targeting a lunar return by 2028 and establishing the basis for a sustained outpost by 2030. It also calls on federal agencies, including the Pentagon and intelligence bodies, to develop a comprehensive space security strategy, while reducing oversight powers of the National Space Council.

Trump had outlined similar ambitions during his first term, initially setting a target of 2024 for a return to the moon.

Oil prices head for another weekly decline

Crude oil prices were on course for a second consecutive weekly drop, as concerns about oversupply and rising optimism around a potential Russia-Ukraine peace agreement outweighed fears of supply disruptions linked to a US-announced blockade on Venezuelan oil shipments.

Brent crude slipped to around $59.74 per barrel, while US West Texas Intermediate traded near $55.95. Both benchmarks were down more than 2% on the week.

Markets continue to price in expectations that global oil supply will outstrip demand into 2026, driven by growing output from non-OPEC producers and muted consumption growth in major economies. US crude prices are down more than 21% year-to-date, marking their weakest annual performance since 2018, while Brent has fallen about 20%, its worst showing since 2020.

Earlier in the week, Trump announced a blockade targeting tankers carrying Venezuelan oil already under US sanctions, although the extent of enforcement remains unclear. He also said on Thursday that talks aimed at ending the war in Ukraine are “getting close to something” ahead of planned discussions between US and Russian officials this weekend.

European equity markets moved little on Friday, pausing after a volatile week dominated by major economic releases and central bank decisions, though benchmarks remained on track to end the week with solid gains.

At around 08:05 GMT, Germany’s DAX was up 0.1%, while France’s CAC 40 and the UK’s FTSE 100 were both down about 0.1%. Over the full week, the DAX was heading for a gain of roughly 0.2%, with the CAC 40 and FTSE 100 each poised to rise by more than 1%.

A breather after intense central bank activity

Market activity appeared subdued as investors digested the outcome of a packed week of policy meetings and data releases. The European Central Bank left its key interest rate unchanged at 2%, in line with expectations, but revised its economic projections higher. The ECB now forecasts eurozone growth of up to 1.4% in 2025 and 1.2% in 2026.

“The economy has been resilient. It grew by 0.3% in the third quarter, mainly reflecting stronger consumption and investment,” said ECB President Christine Lagarde at Thursday’s press conference.

Despite the improved outlook at the regional level, sentiment among German consumers weakened sharply. Data released earlier on Friday showed the consumer sentiment index compiled by GfK and the Nuremberg Institute for Market Decisions falling to -26.9 points in January, from a slightly revised -23.4 previously.

In the UK, the Bank of England delivered an expected interest rate cut on Thursday, but uncertainty remains about its next steps. Several policymakers voiced concerns over stubbornly high wage growth expectations and structural inflation pressures, even as recent data showing a decline in November retail sales pointed to fragile consumer confidence.

Central banks in Sweden and Norway also met during the week, with both opting to keep interest rates unchanged, as markets had anticipated.

EU agrees fresh funding for Ukraine

Investors were also absorbing news that European Union leaders have approved a €90 billion ($105 billion) support package for Ukraine over the next two years. The funding will be raised through joint borrowing backed by the EU budget, rather than by tapping frozen Russian assets.

EU governments had previously debated whether to use around €210 billion of frozen Russian assets, largely held in Belgium, to finance a reparations-style loan for Ukraine, but ultimately opted for common borrowing instead.

Corporate updates weigh on select stocks

On the company front, travel retailer WH Smith (LSE:SMWH) reported lower full-year earnings and reduced its headline profit outlook for the coming year, after weaker trading profits offset revenue growth.

In other news, cosmetics group Coty (NYSE:COTY) sold its remaining 25.8% stake in haircare brand Wella to KKR for $750 million, while retaining rights to a portion of any future sale or IPO proceeds.

Shares in German sportswear groups Adidas (TG:ADS) and Puma (TGR:PUMG) fell after US rival Nike (NYSE:NKE) posted disappointing sales in China, marking a second consecutive quarterly decline in gross margins.

Oil prices head for weekly decline

Oil markets were also under pressure, with prices set for a second consecutive weekly loss. Concerns about a global supply surplus and growing optimism around a potential Russia-Ukraine peace agreement outweighed worries over supply disruptions linked to a US-announced blockade targeting Venezuelan oil shipments.

Brent crude slipped 0.3% to $59.64 per barrel, while US West Texas Intermediate fell 0.3% to $55.84. Both contracts were down more than 2% for the week.

Earlier in the week, Trump announced a blockade aimed at tankers transporting Venezuelan oil already subject to US sanctions, though questions remain over how such measures would be enforced. He also said on Thursday that talks aimed at ending the war in Ukraine are “getting close to something” ahead of planned US discussions with Russian officials this weekend.

UK equities were little changed in early trading on Friday, while sterling edged lower against the US dollar after fresh data showed an unexpected decline in retail sales during November.

By 09:04 GMT, the FTSE 100 was marginally down 0.02%, while the pound slipped 0.06% against the dollar, trading just above the 1.33 level. Elsewhere in Europe, Germany’s DAX fell 0.04% and France’s CAC 40 eased 0.05%.

UK round-up

UK retail sales declined by 0.1% month-on-month in November, according to figures published by the Office for National Statistics. The data followed a revised 0.9% fall in October, previously reported as a 1.1% drop. Economists had been expecting a modest rebound of 0.3%, making the latest reading a negative surprise.

In corporate news, shares in Metro Bank PLC (LSE:MTRO) and OSB Group PLC (LSE:OSB) rose sharply, gaining around 2% and 3% respectively. The rally followed confirmation that both lenders have received regulatory approval to exit the Minimum Requirement for Own Funds and Eligible Liabilities (MREL) regime, which has weighed on profits through elevated interest costs. The Prudential Regulation Authority said the banks will be reclassified as transfer firms with effect from 1 January 2026.

By contrast, WH Smith PLC (LSE:SMWH) came under pressure after reporting weaker full-year earnings and issuing a sharply reduced profit outlook. The travel retailer now expects headline profit of £100–115 million for the year ahead, well below previous guidance of £182.6 million and market expectations of roughly £157 million.

The company posted headline group profit before tax and non-underlying items of £108 million for the year ended 31 August. Headline trading profit fell to £159 million from £170 million a year earlier, while diluted headline earnings per share before non-underlying items dropped 28% to 43.4p. Shares in WH Smith declined in morning trade following the update.

On the currency front, the pound later found some support after the Bank of England released a statement that was seen as less dovish than markets had anticipated. According to ING, several policymakers expressed concern about persistently strong wage growth expectations and structural inflation pressures, lending some resilience to sterling.

ING analysts added that they expect wage growth expectations to begin easing in early 2026 as headline inflation continues to trend lower.

Shares in Metro Bank (LSE:MTRO) and OSB Group (LSE:OSB) rose sharply on Friday, gaining around 2% and 3% respectively, after both lenders secured regulatory approval to leave a debt structure that has been weighing heavily on their interest costs.

The Prudential Regulation Authority confirmed that the two banks will be reclassified as transfer firms under the Minimum Requirement for Own Funds and Eligible Liabilities (MREL), with the change taking effect from 1 January 2026.

The move is expected to deliver meaningful financial relief. Metro Bank, the UK challenger lender, currently services £525 million of MREL debt issued in November 2023 at a coupon of 12%. OSB Group, which focuses on specialist buy-to-let lending, has £700 million of MREL instruments outstanding, carrying a weighted average interest rate of 9.14% and resulting in roughly £64 million of gross annual interest expense.

RBC analysts said removing the burden of MREL interest “should provide a c.4pp annualised uplift” to Metro Bank’s return on tangible equity from FY28E. For OSB, the analysts estimate that avoiding interest payments on both existing and potential future MREL issuance “is equivalent to c.13% of FY27E PBT.”

The regulatory shift follows the Bank of England’s announcement on 15 July to increase the MREL total asset threshold to a range of £25–40 billion from the previous £15–25 billion. Metro Bank reported assets of about £16 billion at the end of the third quarter of 2025, while OSB’s balance sheet stood at roughly £31 billion, leaving both institutions either below or close to the revised threshold.

MREL rules require banks to maintain a layer of loss-absorbing debt to protect taxpayers in the event of a resolution, but the framework applies on an all-or-nothing basis, meaning banks must either comply in full or not at all.

With the reclassification secured, both lenders now face strategic decisions over whether to allow their existing MREL bonds to mature naturally or to redeem them early. Calling the debt ahead of schedule would immediately affect capital ratios, as the securities are currently trading above par.

RBC estimates that an early redemption would result in an initial hit of more than 110 basis points to Metro Bank’s Common Equity Tier 1 ratio, while OSB would see an impact of around 60 basis points. That said, the earnings upside would start straight away. For OSB, RBC calculates “a CET1 payback from lower interest of c.1.1yrs,” indicating that the capital impact could be recouped relatively quickly through interest savings.

OSB said it “will update the market on what this means for its capital and funding plans” alongside its FY25 results. Metro Bank has yet to outline its intentions.

Beyond the immediate profit effect, RBC analysts believe OSB may now have scope to lower its CET1 capital target of around 14%, which currently sits above peer averages. They note that the higher target was driven by rating agency considerations linked to potential MREL issuance, a constraint that has now been removed.

“A 100bps reduction in the CET1 target would free up c.£120m of capital,” equivalent to about 5.5% of the group’s market capitalisation, the brokerage said.