Category: Market News

European equity markets traded slightly higher on Wednesday as investors weighed geopolitical developments, with attention focused on upcoming discussions over Greenland’s future.

By 08:05 GMT, Germany’s DAX was up 0.1%, France’s CAC 40 added 0.4%, and the UK’s FTSE 100 advanced 0.2%.

Greenland meeting in focus

Geopolitics remained a key driver of sentiment, with markets watching a scheduled meeting between U.S. Secretary of State Marco Rubio and officials from Greenland and Denmark. The talks come amid repeated comments by U.S. President Donald Trump about “acquiring” the semi-autonomous Danish territory.

Trump has repeatedly argued that the United States must own Greenland to prevent Russia or China from gaining control of the strategically important, mineral-rich Arctic region. Greenland and Denmark have both stated that the island is not for sale, although Trump has not ruled out the use of force.

Elsewhere, unrest in Iran continued to weigh on global sentiment. The U.S.-based HRANA human rights group said on Wednesday that the death toll from protests has climbed to more than 2,500 people, as authorities move to suppress demonstrations. Trump on Tuesday urged Iranians to continue protesting, saying help is on the way.

U.S. producer inflation awaited

With little in the way of major European economic data scheduled, investor focus was set to shift back to the United States. Data released on Tuesday showed U.S. consumer inflation remained relatively contained, keeping the prospect of rate cuts in 2026 alive.

Attention now turns to upcoming U.S. producer inflation and retail sales figures, which could provide further insight into the future direction of monetary policy.

BP flags hefty impairment

In corporate news, shares in BP (LSE:BP.) were in focus after the energy group said it expects to book $4 billion to $5 billion in impairments in the fourth quarter, largely tied to its energy transition businesses. The company also pointed to weak oil trading.

BP has been seeking to refocus on its core oil and gas operations, stepping back from earlier ambitions to transform itself into a green energy-focused company.

Elsewhere, Pearson (LSE:PSON) reported that sales growth accelerated to 8% in the final quarter of the year, with the education group saying it expects operating profit in 2025 to increase by around 6%.

On Wall Street, investors were preparing for further bank earnings later in the session, with results due from Citigroup (NYSE:C), Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC). The updates follow JPMorgan Chase (NYSE:JPM), which reported quarterly profit above market expectations on Tuesday.

Oil prices slip as inventories rise

Oil prices edged lower on Wednesday, giving back part of their recent gains after Venezuela resumed exports and U.S. crude inventories increased, although developments in Iran remained a key risk factor.

Brent futures fell 0.8% to $64.96 a barrel, while U.S. West Texas Intermediate crude declined 0.8% to $60.69 a barrel.

Both benchmarks had jumped more than 2.5% on Tuesday, with Brent reaching an 11-week high and WTI touching a 10-week peak, extending gains for a fourth consecutive session.

U.S. crude stockpiles rose by 5.23 million barrels in the week ended January 9, according to data from the American Petroleum Institute released on Tuesday. Official inventory figures from the U.S. Energy Information Administration are due later on Wednesday.

Adding to supply dynamics, OPEC member Venezuela has resumed crude exports under a deal between Caracas and Washington following the U.S. capture of Venezuelan President Nicolas Maduro. However, escalating protests in Iran have heightened concerns about potential supply disruptions from the world’s fourth-largest OPEC producer.

UK equities opened firmer on Wednesday, while sterling strengthened against the dollar, as investors digested a series of company updates and took encouragement from positive moves across European markets.

By 0841 GMT, the FTSE 100 was up 0.3%, while the pound rose 0.2% against the US dollar to trade above 1.34. Elsewhere in Europe, Germany’s DAX climbed close to 1% and France’s CAC 40 gained around 0.5%.

FTSE 100 round-up

BP PLC (LSE:BP.) said it expects to book post-tax impairments of between $4 billion and $5 billion in the fourth quarter of 2025, largely within its gas and low-carbon energy division, as lower oil and gas prices weighed on performance. The group also said net debt is forecast to fall to $22–23 billion from $26.1 billion at the end of the third quarter, supported by around $3.5 billion of divestment proceeds in the quarter. Full-year divestments are now expected to total roughly $5.3 billion, ahead of earlier guidance of $4 billion.

Hays Plc (LSE:HAYS) reported a 10% year-on-year fall in group net fees for the three months to December 31. Permanent recruitment fees declined 14%, while temporary and contracting net fees were down 8%, with reduced average hours worked in Germany weighing on temporary revenues.

Vistry Group PLC (LSE:VTY) said total home completions fell about 9% year on year in fiscal 2025 to roughly 15,700 units, compared with 17,225 in FY24. The decline reflected weaker activity across both Partner Funded and Open Market segments, as uncertainty earlier in the year affected delivery.

Pearson PLC (LSE:PSON) reported stronger momentum toward the end of the year, with underlying revenue growth accelerating to 8% in the fourth quarter, led by its Assessment & Qualifications division. For the full year, sales rose 4%, while adjusted operating profit came in at £610–615 million, representing around 6% underlying growth.

Frontier Developments plc (LSE:FDEV) upgraded its full-year outlook after a strong first half, driven by the successful launch of Jurassic World Evolution 3. Revenue for the six months to November 30 increased 26% to £59.6 million, while adjusted operating profit surged 76% to £9.7 million.

Liontrust Asset Management (LSE:LIO) reported net outflows of £1.0 billion for the three months to December 31, 2025, an improvement on £1.6 billion of outflows a year earlier. Assets under management and advice stood at £21.5 billion at the end of December and rose to £21.7 billion by January 10, 2026.

BP Plc (LSE:BP.) said it expects to book post-tax impairments of between $4 billion and $5 billion in the fourth quarter of 2025, largely linked to its gas and low-carbon energy activities, as weaker oil and gas prices reduce asset values. The announcement weighed on the shares in Wednesday trading.

The company said the write-downs are mainly associated with its transition-related businesses and will be excluded from underlying replacement cost profit. However, analysts at Jefferies cautioned that the charges could still have an adverse effect on gearing.

Jefferies characterised the update as a “small -ve”, estimating a roughly 5% cut to consensus net income of $1.83 billion. The downgrade was attributed primarily to weaker-than-expected price realisations in the gas and low-carbon energy division.

BP said net debt is forecast to decline to between $22 billion and $23 billion by the end of the quarter, compared with $26.1 billion at the end of the third quarter. The reduction is supported by around $3.5 billion of divestment proceeds. Full-year divestments are now expected to total about $5.3 billion, exceeding earlier guidance of $4 billion. Jefferies said the pace of debt reduction broadly matches expectations, although it sits slightly above consensus forecasts.

Group upstream production is expected to be broadly flat quarter on quarter, in line with guidance. Oil output is forecast to be unchanged, while gas and low-carbon energy production is expected to decline. Figures include BP’s share of equity-accounted entities.

Within oil production and operations, weaker realised prices and timing effects in the Gulf of America and the United Arab Emirates are expected to lower underlying replacement cost EBIT by $0.2 billion to $0.4 billion. Jefferies described this impact as marginally negative relative to consensus assumptions.

In the gas and low-carbon energy segment, realisations are expected to reduce underlying replacement cost EBIT by $0.1 billion to $0.3 billion, including the impact of non-Henry Hub gas pricing. Gas marketing and trading performance is expected to be “average,” similar to the previous quarter, which Jefferies identified as the main downside driver in the update.

The customers and products division is expected to reflect seasonally lower customer volumes alongside broadly flat fuel margins. Realised refining margins are projected at around $0.1 billion, offset by increased turnaround activity and temporary capacity reductions following a fire at the Whiting refinery. Oil trading results are expected to remain weak, consistent with the third quarter, which Jefferies said was already anticipated by the market.

BP also disclosed that Brent crude prices averaged $63.73 per barrel during the fourth quarter, down from $69.13 in the previous quarter. Henry Hub gas prices averaged $3.55 per mmbtu, compared with $3.07 previously, while BP’s refining indicator margin fell to $15.2 per barrel from $15.8.

Finally, the company said its full-year 2025 underlying effective tax rate is now expected to be around 42%, above earlier guidance of roughly 40%, mainly reflecting changes in the geographical mix of profits. Jefferies said this was not a major surprise but noted it adds modest pressure at the group level.

MS International (LSE:MSI) reported largely steady interim results for the six months to 31 October 2025, with profit before tax of £8.47 million on revenue of £55.81 million, marginally lower year on year. On a like-for-like basis, excluding derivative impacts, profit before tax increased to £9.28 million, while cash balances improved to £35.73 million, reinforcing the group’s financial resilience.

The company described 2025 as a pivotal year following its strategic decision to refocus on the Defence and Security division and to explore the sale of its Forgings and Petrol Station Superstructures and Branding businesses. This repositioning has been accompanied by changes to the board, bringing in a younger and more internationally experienced leadership team, and by a strengthened operational footprint across the US and Europe.

Within Defence and Security, MS International secured a further annual contract from the US Navy for its MSI-DS 30mm naval weapon system. The group also expanded its support and maintenance facilities in the US and Poland and enhanced its US business development capabilities, positioning the division for growth across both naval and land-based defence markets.

The Forgings division continues to face softer near-term demand in the UK and US amid trade and policy uncertainty. However, the business has begun deliveries to Mitsubishi Logisnext America and is actively quoting for additional major lift-truck OEM programmes, pointing to a potentially meaningful growth pipeline in the US over the medium term.

Meanwhile, the Petrol Station Superstructures and Branding operations, now successfully combined, continue to trade strongly. Demand is being driven by large-scale fuel forecourt transformation projects and the evolution of multi-purpose fuel hubs incorporating EV charging and food-to-go offers. In response, the group plans to expand manufacturing capacity to capture rising demand from major retail customers.

Overall, MS International’s outlook is supported by solid financial performance and recent strategic progress, particularly within Defence and Security. However, technical indicators point to bearish share price momentum, and ongoing cash flow demands present potential risks. While valuation appears reasonable, it is not sufficient on its own to fully offset these technical and operational uncertainties.

More about MS International

MS International is a UK-based engineering group operating across Defence and Security, Forgings, and Petrol Station Superstructures and Branding. The company supplies naval and land weapon systems, industrial forgings and components, and designs and manufactures forecourt infrastructure solutions, serving defence customers in the UK, US and Europe alongside major fuel retailers investing in modern, multi-purpose fuel hubs.