Category: Market Summary

European equity markets opened in negative territory on Thursday as investors remained cautious ahead of several major central bank interest rate announcements while closely following geopolitical developments in the Middle East.

At 08:17 GMT, the pan-European Stoxx 600 index was down 1.2%. Germany’s DAX declined 1.6%, France’s CAC 40 fell 1.1%, and the UK’s FTSE 100 slipped 1.2%.

Market attention is focused on policy decisions expected later in the day from the European Central Bank and the Bank of England. Investors are looking for clues from policymakers on how the ongoing conflict involving Iran could affect economic conditions across Europe.

Both the ECB and the BoE are widely expected to keep interest rates unchanged, following a similar stance taken by several other major central banks on Wednesday. The Federal Reserve, the Bank of Japan and the Bank of Canada all opted to hold rates steady, although they warned that inflationary pressures could increase if the joint U.S.–Israeli military action against Iran evolves into a prolonged conflict.

Central banks now face the delicate challenge of managing inflation risks without undermining economic growth — a situation reminiscent of the energy shock triggered by Russia’s full-scale invasion of Ukraine in 2022.

As a result, concerns about stagflation, characterized by weak economic activity combined with elevated inflation, have intensified. Investors have responded by adopting a more defensive stance, scaling back expectations for near-term interest rate cuts, reducing exposure to equities and increasing allocations to the U.S. dollar.

Oil climbs above $110 per barrel

Oil markets also extended their rally, with Brent crude, the global benchmark, rising above $110 per barrel.

The latest jump followed Iranian attacks on energy infrastructure in the Middle East, including facilities linked to the strategically important South Pars gas field.

“Supply risks continue to grow in energy markets amid an escalation in attacks on Persian Gulf energy infrastructure,” analysts at ING said in a note.

By 06:59 GMT, Brent crude futures had surged 6.0% to $113.74 per barrel, while U.S. West Texas Intermediate crude was up 1.0% at $96.26 per barrel. WTI has recently traded at its widest discount to Brent in more than ten years, partly due to releases from the U.S. strategic petroleum reserve.

UK equities moved lower on Thursday ahead of the Bank of England’s interest rate decision, while oil prices surged as tensions in the Middle East intensified. Brent crude climbed to about $114 per barrel, heightening investor concerns about inflation and global economic stability. The latest UK labour data showed unemployment holding steady while wage growth slowed to around 3.9%.

At 08:32 GMT, the benchmark FTSE 100 index was down 1.6%. Meanwhile, the British pound edged slightly higher against the dollar, with GBP/USD rising 0.01% to 1.3258.

Elsewhere in Europe, markets were also under pressure. Germany’s DAX dropped 2.03%, while France’s CAC 40 declined by 1.5%.

Global market developments

Federal Reserve Chair Jerome Powell delivered a relatively hawkish message, indicating that inflation must decline further before policymakers consider cutting interest rates. His remarks dampened expectations for a near-term shift toward monetary easing.

In Asia, the Bank of Japan left its interest rates unchanged overnight, although one policymaker dissented from the decision.

Both the European Central Bank and the Bank of England are widely expected to keep interest rates unchanged later on Thursday. Such decisions would extend the broader pause in policy adjustments among major global central banks after several institutions also held rates steady earlier in the week.

Middle East developments

Geopolitical risks intensified after Israel launched a strike on Iran’s South Pars gas field. Iran responded by targeting energy infrastructure in Qatar and the United Arab Emirates.

Tehran also warned that energy facilities in other Gulf countries could become targets for additional retaliatory actions, raising fears of wider disruption in global energy markets.

UK corporate updates

LSL Property Services (LSE:LSL) reported underlying operating profit of £32.6 million for fiscal 2025, slightly above analysts’ expectations of £32.2 million. The company reiterated its outlook for further profit growth in 2026, reporting a return on capital employed of 35% and net cash of £27.8 million. It also declared a total dividend of 11.4 pence per share and previously announced a £12 million share buyback programme in January.

DFS Furniture plc (LSE:DFS) reaffirmed its full-year profit guidance of £43–50 million, despite noting weaker customer traffic recently due to adverse weather conditions. The retailer reported first-half revenue of £547.7 million, an 8.6% increase year on year, while pre-tax profit rose 82% to £31 million.

Eurocell (LSE:ECEL) posted preliminary 2025 revenue growth of 13%, largely driven by its acquisition of Alunet. Adjusted operating profit rose 6% during the year, though adjusted pre-tax profit declined 5% to £19 million as a result of higher financing costs.

Central Asia Metals (LSE:CAML) reported revenue of $229.9 million for 2025, exceeding the consensus estimate of $224.9 million from analysts. However, the company recorded a net loss after booking a $117.8 million impairment charge at its Sasa mine. Adjusted free cash flow reached $56 million and EBITDA totalled $101.8 million, representing a 44% margin.

Capital Ltd (LSE:CAPD) reported a sharp increase in annual profitability, with net profit after tax jumping 318% to $71 million in 2025. Revenue slipped slightly by 0.6%, while adjusted EBITDA rose 1.1% as the company continued expanding its mining services and investment portfolio.

European stock markets showed mixed movements on Wednesday as investors remained cautious ahead of the U.S. Federal Reserve’s interest rate decision expected later in the day.

Market sentiment received some support from declining oil prices despite ongoing geopolitical tensions, including confirmation by Iran’s supreme national security council of the death of its security chief, Ali Larijani.

In early trading, the U.K.’s FTSE 100 Index slipped 0.1 percent, while Germany’s DAX Index edged up 0.1 percent and France’s CAC 40 Index gained 0.5 percent.

Shares of British insurer Prudential (LSE:PRU) dropped 2.2 percent even after the company reported a 12 percent increase in annual new business profit, raised its dividend and unveiled plans to return $1.3 billion in capital to shareholders in 2027.

Oil and gas producer Ithaca Energy (LSE:ITH) declined nearly 6 percent after one-off charges weighed on its adjusted profit for 2025.

Diploma (LSE:DPLM), which distributes industrial controls, seals and life sciences products, surged 17 percent after raising its guidance for fiscal year 2026.

Barclays (LSE:BARC) shares advanced about 2 percent following the announcement of a new strategic partnership with software company Sage Group.

In France, vaccine developer Valneva (EU:VLA) traded lower after reporting a wider net loss for fiscal year 2025.

Technip Energies (EU:TE) rose 1.4 percent after the energy technology and engineering company announced a share buyback program worth up to 150 million euros.

German hydrogen technology company Thyssenkrupp Nucera (TG:NCH2) fell 8 percent after cutting its full-year outlook.

Meanwhile, meal kit provider HelloFresh (TG:HFG) plunged 7 percent after posting weaker-than-expected fourth-quarter core earnings and issuing a lower profit forecast for 2026.

U.S. equity futures were modestly higher early Wednesday as investors awaited the Federal Reserve’s latest interest rate decision while continuing to track developments in the conflict involving Iran. Oil prices eased slightly but remained above the $100-per-barrel mark, keeping concerns alive that renewed inflation pressures could delay any potential Fed rate cuts later this year. In corporate news, memory-chip maker Micron is scheduled to release earnings after the close, while athleisure retailer Lululemon issued weaker-than-expected annual guidance.

Futures move higher

Futures tied to the main U.S. stock indices advanced on Wednesday morning as traders positioned themselves ahead of the Fed’s policy announcement and monitored geopolitical developments.

As of 04:18 ET, Dow futures were up 258 points, or 0.5%. S&P 500 futures rose 34 points, also 0.5%, while Nasdaq 100 futures gained 159 points, or 0.6%.

Wall Street’s major averages ended the previous session in positive territory. Analysts at Vital Knowledge said reports that two senior Iranian figures had been killed, along with the resignation of a Trump administration official in protest over U.S. strikes in Iran, had raised hopes that a ceasefire could eventually materialize.

Nonetheless, the Strait of Hormuz—one of the world’s most critical oil shipping routes, carrying roughly 20% of global supply—remains effectively closed due to threats of Iranian attacks on commercial vessels. President Donald Trump’s efforts to rally international backing to reopen the strait have largely failed.

Uncertainty also surrounds how long U.S. military operations will continue. Trump reiterated on Tuesday that the conflict could end soon, though similar comments since the start of the joint U.S.-Israeli campaign against Iran in late February have yet to lead to a ceasefire.

Oil retreats but remains elevated

Pressure on Trump to find a diplomatic exit appears to be increasing, including criticism from within his own Republican Party. However, there have been few signs that the U.S. intends to scale back its military campaign.

On Tuesday, U.S. forces struck Iran’s coastline near the Strait of Hormuz using 5,000-pound bombs, targeting cruise missile facilities capable of threatening ships passing through the waterway, according to the U.S. Central Command.

Brent crude futures, the global benchmark, fell 1.3% to $102.10 per barrel, while U.S. West Texas Intermediate crude futures declined 2.3% to $93.25 per barrel. The drop came after crude shipments resumed through a pipeline linking Iraq’s Kirkuk oil fields with Turkey’s Ceyhan port, providing some relief to markets worried about supply disruptions.

Even so, Brent remains far above its levels before the conflict began, pushing U.S. gasoline prices to their highest point since October 2023. Rising fuel costs could become a key issue ahead of the November midterm elections and may also contribute to broader inflationary pressures.

Fed policy decision ahead

Against this backdrop of geopolitical tensions and rising energy prices, the Federal Reserve is expected to announce its latest interest rate decision later Wednesday.

Financial markets widely anticipate that the central bank will keep rates unchanged following its two-day policy meeting as officials assess the outlook for inflation and recent economic indicators suggesting the U.S. labor market could be weakening.

Investors will be particularly focused on the press conference following the decision, led by Fed Chair Jerome Powell, who is expected to step down from the role in May. Powell may provide one of the earliest indications of how the Fed views the economic impact of the Iran conflict and the surge in oil prices.

Before the war began, investors had been expecting a possible rate cut later in the year, perhaps in the second half. However, analysts at ING said the ongoing conflict could lead the Fed to postpone any move toward monetary easing.

Micron earnings awaited

Investors will also be watching results from Micron (NASDAQ:MU), which is scheduled to report earnings after the market closes on Wednesday.

The company previously issued an optimistic adjusted profit outlook for its second quarter in December, driven by elevated memory chip prices amid persistent supply constraints.

As large technology companies continue to expand investments in artificial intelligence, demand for advanced data centers and the high-performance memory chips they require has also increased.

That trend could benefit Micron, whose chips are widely used in data center servers. The company projected fiscal second-quarter adjusted earnings of $8.42 per share, plus or minus $0.20—nearly double the analyst consensus cited by Reuters.

Chief Executive Sanjay Mehrotra told investors last year that tight supply in the memory chip market is likely to persist beyond 2026. He also said Micron may only be able to meet between half and two-thirds of demand from some key customers.

Lululemon forecast disappoints

Shares of Lululemon Athletica (NASDAQ:LULU) fell in premarket trading Wednesday after the athletic apparel retailer issued revenue and earnings guidance for 2026 that came in below analyst expectations.

The company also appointed a former Levi Strauss executive to its board of directors as speculation grows around a potential proxy contest.

Although Lululemon said “almost all” of the costs related to U.S. import tariffs would be offset through a strategy aimed at increasing full-price sales, the company continues to face multiple headwinds.

These include an extended search for a new chief executive, slowing consumer demand, and intensifying competition in the sportswear market.

Lululemon expects annual revenue of between $11.35 billion and $11.50 billion, compared with analyst forecasts of $11.52 billion, according to LSEG data cited by Reuters. The company also projected annual earnings of $12.10 to $12.30 per share, below Wall Street estimates.

European equity markets traded mostly higher on Tuesday, even as oil prices climbed again amid ongoing concerns about tightening global supply.

U.S. President Donald Trump criticized several Western allies after they declined his request to deploy naval vessels to escort oil tankers through the Strait of Hormuz, as the U.S.-Israeli conflict with Iran entered its 18th day.

Iran has carried out a series of attacks against the United Arab Emirates (UAE), reportedly targeting Dubai International Airport and the Fujairah oil port, in what marks a significant escalation in the conflict.

Germany’s DAX Index was up 0.6 percent during the session, while France’s CAC 40 Index and the U.K.’s FTSE 100 Index both advanced by 0.8 percent.

Shares of Trustpilot Group (LSE:TRST) surged in London after the online review platform released strong full-year 2025 results and said it expects revenue to increase “in the high teens” on a constant-currency basis in 2026.

German life sciences company Sartorius (TG:SRT3) also posted solid gains after announcing new medium-term financial targets.

Industrial components manufacturer Essentra (LSE:ESNT) moved higher as well after reporting full-year 2025 results that matched analyst expectations.

In contrast, Close Brothers (LSE:CBG) declined sharply. Although the lender reported a smaller loss for the first half of its financial year, it also announced plans to eliminate about 600 jobs by 2027 as part of a broader cost-cutting program.

European equity markets opened cautiously on Tuesday, with major indices struggling to gain momentum as oil prices moved higher following reports that several U.S. allies declined President Donald Trump’s request to assist in reopening a key maritime route near Iran.

At 08:03 GMT, the pan-European Stoxx 600 index slipped 0.1% to 598.08. Germany’s DAX declined 0.3%, France’s CAC 40 was broadly flat, while the UK’s FTSE 100 edged up 0.1%.

Brent crude, the global oil benchmark, surged 3.3% to $103.58 in early European trading after Japan, Germany and Australia signaled they would not participate in U.S.-led efforts to restore shipping through the Strait of Hormuz. The strategic waterway handles roughly one-fifth of global oil shipments.

Following the launch of joint U.S.-Israeli military strikes against Iran in late February, Tehran responded by threatening to target ships attempting to pass through the narrow strait, effectively disrupting traffic.

As a result, several container shipping companies have suspended operations in the area, citing crew safety concerns and difficulties securing insurance coverage for voyages through the region.

The jump in oil prices has heightened concerns about renewed global inflationary pressures, raising the possibility that central banks could reconsider the pace of interest rate cuts. With inflation risks increasing, both the European Central Bank and the U.S. Federal Reserve are widely expected to keep interest rates unchanged at their upcoming policy meetings this week.

UK equities edged higher on Tuesday morning, building on the previous session’s gains, while the pound slipped slightly but remained above the $1.33 level. European markets traded with mixed momentum as oil prices rose amid renewed tensions in the Middle East.

Investor attention this week is centred on upcoming central bank meetings and geopolitical developments. Jefferies expects both the Federal Reserve and the European Central Bank to maintain a cautious “wait-and-see” approach given ongoing uncertainty, while reiterating its view that the rate hikes priced into the short end of the European yield curve will gradually fade.

At 08:31 GMT, the FTSE 100 was up 0.1%, while sterling weakened 0.05% against the dollar to $1.3314. On the continent, Germany’s DAX declined 0.3%, while France’s CAC 40 gained 0.09%.

UK corporate updates

Trustpilot Group PLC (LSE:TRST) reported fiscal 2025 results ahead of profit expectations and issued fiscal 2026 guidance above analyst forecasts, supported by stronger visibility in artificial intelligence search tools and continued expansion among enterprise customers.

The online review platform generated revenue of $261.1 million for the year ending December 31, 2025, representing a 20% increase at constant currency from $210.7 million the previous year. Adjusted EBITDA reached $40.7 million, exceeding the company-compiled consensus of $38.5 million by 5.7%. Adjusted diluted earnings per share came in at 4.8 cents, compared with analyst expectations of 5.0 cents.

Wickes Group PLC (LSE:WIX) announced full-year adjusted profit before tax of £49.9 million for the 52 weeks to December 27, 2025, surpassing analyst consensus of £48.2 million and representing a 14.4% rise from £43.6 million in the previous year. Revenue increased 5.9% to £1,636.2 million, compared with £1,544.5 million in 2024.

Within the business, the retail division recorded revenue of £1,208.9 million, up 6.5%, while the Design & Installation segment grew 4.4% to £427.3 million. The company noted that improved productivity and operating leverage helped partly offset rising costs during the year.

Ashtead Technology Holdings PLC (LSE:AT.) reported full-year 2025 revenue of £203.2 million on Tuesday, representing a 21% increase year on year, as the subsea technology group reaffirmed its confidence in delivering continued progress through 2026 while monitoring geopolitical developments in the Middle East.

Adjusted earnings per share reached 49.4 pence for the year ended December 31, 2025, up 10% from 45.0 pence a year earlier. Revenue growth reflected 3% organic expansion and a 19% boost from the acquisitions of Seatronics and J2 Subsea, partly offset by a 1% foreign exchange headwind.

Close Brothers Group plc (LSE:CBG) reported a decline in first-half profit as a smaller loan book reduced income, though cost discipline and improving credit quality helped offset the impact of the motor finance commission issue. Adjusted operating profit dropped 19% to £65.2 million for the six months to January 31, 2026.

On a statutory basis, the lender recorded a pre-tax loss of £65.5 million after booking a £135 million provision in October related to potential motor finance redress, part of a wider industry issue linked to commission structures on car loans.

Sthree Plc (LSE:STEM) said first-quarter net fees fell 8% and confirmed that its chief financial officer will step down, as weakness in European markets outweighed growth in the United States and Japan.

The global STEM workforce consultancy reported group net fees of £71.7 million for the three months ended February 28, compared with £78.4 million in the same period last year.

Travis Perkins PLC (LSE:TPK) reported a full-year net loss of £176 million for 2025, widening from a £77 million loss the previous year, marking the third consecutive year of substantial charges after recording £222 million in write-downs across its Merchanting and Toolstation operations.

The company’s operating loss widened to £97 million from a profit of £2 million in 2024. Adjusted operating profit, excluding the charges, declined to £133 million from £152 million, though it exceeded RBC Capital Markets’ forecast of £128 million and market consensus of £132 million.

Essentra PLC (LSE:ESNT) reported full-year 2025 results broadly in line with analyst expectations, with revenue of £302.0 million and adjusted earnings per share of 6.1 pence, although margins declined amid operational challenges.

Revenue rose 2.5% at constant currency compared with the previous year, though reported revenue was broadly unchanged at £302.0 million versus £302.4 million in 2024. All regions recorded growth in constant currency terms, with EMEA up 2.6%, the Americas up 2.0%, and APAC up 3.1%. Adjusted operating profit declined to £32.0 million from £40.1 million, while adjusted operating margin fell to 10.6% from 13.3%.

Boku Inc (LSE:BOKU) reported full-year 2025 results consistent with its January trading update, showing revenue growth of 30% to $128.8 million as the payments technology firm expanded across multiple markets.

Growth was led by the EMEA region, where revenue rose 39% in the second half. Total Payment Volume increased 27% to $15.7 billion. Adjusted EBITDA rose 36% to $41.3 million, equating to a margin of 32.1%.

Defence cooperation initiative

Finland, the Netherlands and the United Kingdom announced Tuesday that they are exploring the creation of a new mechanism for joint defence financing and procurement, with the aim of launching the initiative by 2027.

The three NATO members said the framework would pool demand, enable coordinated procurement, accelerate defence investment and expand the availability of critical capabilities such as munitions as they strengthen shared defence and security commitments.

The proposal comes amid rising geopolitical tensions and security concerns, including Russia’s ongoing war in Ukraine, which the countries said is contributing to global instability and challenging the rules-based international order.