Category: Market News

Oil markets recovered on Thursday, with prices climbing more than 1% after steep losses in the previous session, as investors continued to monitor uncertainty surrounding peace negotiations between the United States and Iran while falling inventories and supply concerns provided additional support.

By 06:18 GMT, Brent crude futures were up US$1.27, or 1.21%, at US$106.29 per barrel, while U.S. West Texas Intermediate crude futures gained US$1.29, or 1.31%, to US$99.55 per barrel.

Both benchmarks had plunged more than 5.6% on Wednesday to their lowest levels in over a week after President Donald Trump said negotiations with Iran were in the “final stages,” although he also warned that additional attacks could follow if Tehran refused to accept a peace agreement.

“The oil market remains overly sensitive to Iran-related headlines, with participants continuing to pin considerable hope on reports that talks between the U.S. and Iran are progressing,” ING analysts said in a note Thursday.

“We’ve been in this situation multiple times before, which ultimately led to disappointment,” they added, while forecasting an average Brent crude price of US$104 per barrel during the current quarter.

Iran responded by warning against further military action and announced new measures aimed at strengthening its control over the Strait of Hormuz, the strategic maritime passage that before the conflict handled oil and liquefied natural gas shipments equivalent to around 20% of global demand.

On Wednesday, Tehran announced the creation of a new “Persian Gulf Strait Authority,” stating that a “controlled maritime zone” would be enforced within the Strait of Hormuz.

Iran effectively shut the strait following U.S. and Israeli strikes that triggered the conflict on February 28. Although most military activity has eased since a ceasefire was reached in April, Iran continues restricting maritime traffic through Hormuz while the United States maintains a blockade along Iran’s coastline.

The disruption to supplies from the critical Middle Eastern energy-producing region has forced governments to draw heavily on both strategic and commercial reserves, increasing concerns over rapidly shrinking inventories.

According to the U.S. Energy Information Administration, the United States withdrew nearly 10 million barrels from its Strategic Petroleum Reserve last week, marking the largest weekly drawdown on record.

Additional support for crude prices came from EIA data showing a sharper-than-expected decline in U.S. oil inventories, reinforcing concerns about ongoing supply disruptions.

“The drawdown in oil inventories will make it difficult for oil prices to remain low,” said Mingyu Gao, chief researcher for energy and chemicals at China Futures.

“With the Strait of Hormuz blocked, global refined-product and onshore crude inventories are expected to fall below their lowest levels for this time of year in the past five years by late May and late June.”

Gold prices traded modestly lower on Thursday as markets weighed optimism over a possible diplomatic breakthrough between the United States and Iran against the pressure of elevated bond yields and a resilient U.S. dollar.

By 05:33 ET (09:33 GMT), spot gold was down 0.2% at US$4,536.09 an ounce, while gold futures declined 0.5% to US$4,536.01 an ounce.

Investor sentiment has increasingly focused on hopes that negotiations could bring an end to the conflict between Washington and Tehran, which has continued for more than two months. President Donald Trump said the United States was in the “final stages” of discussions surrounding a draft peace agreement, although he cautioned that tensions could escalate again, warning that “we’re going to do some things that are a little bit nasty” if talks fail.

Iran has meanwhile stated that it is reviewing the latest proposals submitted by Washington aimed at ending the war.

Markets remain especially attentive to any developments that could reopen the Strait of Hormuz, the crucial shipping corridor off Iran’s southern coastline that has been largely shut to tanker traffic since the outbreak of the conflict in late February. Shipping data referenced in media reports earlier this week indicated that some vessels have recently resumed passage through the route.

Brent crude futures, the global benchmark for oil prices, were last trading lower at US$103.97 a barrel after retreating from levels around US$110 following Trump’s remarks about a potential agreement. Despite the decline, oil remains substantially above pre-conflict levels near US$70 a barrel.

Concerns continue to circulate that a prolonged Middle East conflict could reignite global inflation through higher energy prices, potentially prompting central banks to keep interest rates elevated or tighten policy further.

Gold, which does not generate yield, often struggles to compete in high-rate environments.

At the same time, demand for the U.S. dollar as a safe-haven asset during the geopolitical crisis has reduced some of gold’s appeal. Some investors believe the United States could be comparatively insulated from rising oil prices because of its role as a major energy exporter. A stronger dollar also makes gold more expensive for holders of foreign currencies.

Other precious metals also weakened, giving back part of their recent gains. Spot platinum fell 0.3% to US$1,949.70 per ounce, while spot silver dropped 0.6% to US$75.4065 per ounce.

“Base metals are starting the morning on a cautious footing as markets continue to balance shifting geopolitical signals with a softer macro backdrop,” analysts at Britannia Global Markets said in a note.

French videogame publisher Ubisoft (EU:UBI) warned on Wednesday that it expects another difficult financial year ahead after reporting a record operating loss for the year ended March 2026, intensifying pressure on the company as it continues its restructuring efforts.

The group posted an International Financial Reporting Standards (IFRS) operating loss of €1.3 billion (US$1.40 billion), which chief financial officer Frederic Duguet described during a press call as a record result for the company. Net bookings declined 17.4% year-on-year to €1.53 billion.

Investor reaction was sharply negative, with Ubisoft shares falling more than 15% in early Thursday trading by 08:04 GMT.

Looking ahead, Ubisoft said it expects revenue in 2026-27 to decline by around 8% to 9%, while forecasting a high single-digit operating loss margin and potential cash burn of up to €500 million. Management said the company aims to return to profitability and positive free cash flow in 2027-28, supported by a stronger pipeline of game releases and expansion in live-service multiplayer titles designed to encourage long-term player spending, similar to Riot Games’ “League of Legends.”

The company added that it currently has sufficient liquidity to meet near-term debt obligations and confirmed it is in discussions with lenders regarding refinancing upcoming maturities.

“Ubisoft appears to be responding to the (difficult) market environment, but with significant uncertainties around delivery as well as effectiveness of the new operational structure, we expect the risk-reward to remain wide,” Morgan Stanley analysts commented on the stock in a post-earnings note.

Ubisoft also announced that Nicolo Laurent, former chief executive of Tencent-owned Riot Games, will join Vantage Studios — the Tencent-Ubisoft partnership overseeing Ubisoft’s major franchises — as a special adviser.

The publisher said first-quarter net bookings are expected to reach around €250 million, ahead of the launch of “Assassin’s Creed Black Flag Resynced,” a remake of the company’s 2013 Caribbean-themed hit title.

As part of its restructuring programme, Ubisoft reduced its workforce by around 1,200 employees over the past year, leaving total headcount at approximately 16,600 staff. The group also cut fixed costs by €118 million to €1.435 billion during 2025-26 and is targeting a further reduction to €1.25 billion by March 2028 as it works to stabilise cash flow generation.

ICG (LSE:ICG) shares slipped 1.8% on Thursday after the alternative asset manager reported full-year 2026 results that beat expectations in its fund management operations but disappointed on investment returns.

The group’s Fund Management Company division delivered pre-tax profit that was 26% ahead of company-compiled analyst consensus. The stronger performance was driven by management fees that exceeded forecasts by 12%, while operating expenses came in 9% lower than expected. ICG said management fee growth benefited from around £51.4 million in catch-up fees during the year, alongside a continued shift toward higher-return investment strategies.

However, performance from the Investment Company segment fell short of expectations after a 2% negative return in the debt portfolio weighed on net investment returns. The decline was mainly linked to mark-to-market movements within collateralised loan obligations, although other asset classes generated annual returns of between 5% and 8%.

Fee-paying assets under management rose to US$86.5 billion, around 2% ahead of analyst consensus, supported by fundraising of US$7.6 billion during the period. Across fiscal year 2025, the company raised roughly US$40 billion, equivalent to around 73% of its target to raise at least US$55 billion between fiscal years 2025 and 2028.

Much of the latest fundraising activity was driven by Europe IX, which is expected to become ICG’s first commingled investment fund to exceed €10 billion in size. Fourth-quarter fundraising alone totalled US$3.2 billion.

The company also updated its medium-term financial guidance to include expectations for expansion in fee-related earnings margins, excluding catch-up fees. ICG maintained its target of raising at least US$55 billion over the four-year period ending March 2028, while reiterating guidance for performance fees to contribute around 10% to 20% of total fee income.

Management indicated that fundraising activity in fiscal year 2027 is expected to come in below the levels achieved in fiscal year 2026.

More about ICG

ICG is a global alternative asset management firm specialising in private debt, credit and structured capital strategies. The company manages investments across corporate, real asset and secondary markets for institutional clients worldwide, generating revenue through management fees, investment returns and performance-related income.

Autotrader (LSE:AUTO) shares moved lower on Thursday after the UK automotive marketplace operator reported full-year results that fell short of company-compiled consensus forecasts amid continued pressure in the used car market.

The stock declined more than 3% in early London trading following the release of results for the year ended 31 March 2026.

Group revenue increased 4% to £624.3 million, including £585.3 million from the core Autotrader platform and £39.0 million from Autorama. Operating profit also rose 4% to £392.7 million, while the main Autotrader business maintained an operating margin of 70%.

However, both revenue and operating profit came in below analyst expectations. Average revenue per retailer increased 5% to £2,995, while profit before tax rose 3% to £388.8 million. Basic earnings per share climbed 8% to 34.17 pence.

“We continued to grow both revenue and profits this year, despite a challenging backdrop,” chief executive Nathan Coe said. “Our competitive position has strengthened, with six times more time spent on Autotrader than all our main competitors combined.”

Looking ahead, the company forecast FY2027 group operating profit in the range of £395 million to £415 million, with the midpoint slightly below analyst consensus of £418 million.

Management said it expects the stock lever to recover to between minus £30 million and minus £40 million over the full year, while average retailer forecourts are forecast to decline by 1% to 2%. The product lever is expected to contribute between £65 million and £75 million to ARPR growth, and Autorama is anticipated to deliver a small profit during FY2027.

“FY27 guidance is also softer than expected, with ARPR growth expected to come in below consensus, mainly due to a weaker stock lever in ARPR,” Citi analysts noted.

Autotrader also announced plans to return around £600 million to shareholders through a combination of approximately £500 million in share buybacks and dividends equivalent to one-third of net income. Total shareholder returns across FY2026 and FY2027 are expected to exceed £1 billion.

The board proposed a final dividend of 7.8 pence per share, taking the full-year payout to 11.6 pence, compared with 10.6 pence in the previous year.

During the year, the company returned £463.2 million to shareholders through dividends and an accelerated share buyback programme, repurchasing 58.5 million shares, equivalent to 6.6% of issued share capital. The group also drew £165 million from its debt facility, leaving leverage at 0.3 times.

More about Autotrader

Auto Trader Group plc operates the UK’s largest digital automotive marketplace, connecting car buyers, retailers and manufacturers through online vehicle advertising and data-driven services. The company generates revenue primarily through retailer subscriptions, advertising products and automotive software solutions, while also expanding into vehicle leasing through its Autorama division.

Smiths Group Plc (LSE:SMIN) has reduced its full-year FY2026 organic revenue growth forecast to around 2%, down from previous guidance of 3% to 4%, after disruption linked to the Middle East conflict negatively affected third-quarter trading.

The revised outlook fell short of analyst expectations of 2.8% organic growth, although it remained ahead of Jefferies’ forecast of 1.8%.

For the third quarter ended 2 May, organic revenue growth from continuing operations — comprising John Crane and Flex-Tek — was flat compared with the previous year. Across the first nine months of the financial year, organic revenue growth stood at 0.2%, while reported revenue growth reached 1.6%, supported by acquisitions.

Chief executive Roland Carter said, “Whilst this moderates growth in the near term, it is set against a backdrop of increasing global demand for energy security and resilience, and we are well positioned to support our customers. This underpins our confidence in the strength of our medium-term growth outlook.”

Smiths said the Middle East conflict reduced John Crane sales by approximately £10 million during the quarter, with disruption lasting around two months. Despite this, the division still delivered organic revenue growth of 2.8%, while management highlighted continued strength in the order book and a positive book-to-bill ratio.

“JC was impacted by the ME, although the order book strengthened and book-to-bill was positive, while Flex-Tek saw ongoing sales declines yoy given a tough comp and challenging US construction market. There is nothing in here that should be a surprise to the Street, in our view, although sales expectations were a touch high,” said analysts at Jefferies.

Flex-Tek recorded an organic revenue decline of 3.9% during the quarter against a strong prior-year comparison. The construction segment continued to be affected by weakness in the U.S. residential housing market, although the company said sequential improvement from the second quarter is expected to continue into the fourth quarter, supported by pricing initiatives.

Within Thermal Solutions, revenue declined mainly due to the completion of a major ultra-high heating project in the prior year. Aerospace operations, however, delivered strong growth driven by execution of the order book and improved pricing and volumes following contract renewals.

On profitability, management now expects FY2026 headline operating margins to come in slightly above 20%, compared with previous guidance of around 20%. The updated forecast is marginally ahead of analyst consensus expectations of 20.1%.

Smiths also confirmed that the disposal of Smiths Interconnect to Mole was completed on 1 April and that £506 million of its planned £1 billion share buyback linked to the transaction has already been executed.

The regulatory approval process for the proposed sale of Smiths Detection remains ongoing, with completion currently anticipated during the second half of calendar year 2026.

More about Smiths Group

Smiths Group Plc is a UK-based engineering and technology group serving energy, industrial, aerospace and infrastructure markets. Through businesses including John Crane and Flex-Tek, the company provides engineered components, industrial technologies and specialised systems focused on energy efficiency, safety, connectivity and operational resilience across global markets.