Category: Market Summary

European equity markets were little changed on Tuesday as investors adopted a cautious stance towards technology stocks amid growing concerns over valuations linked to the artificial intelligence boom, while attention also turned to the NATO summit in Turkey for potential defence spending announcements.

The pan-European STOXX 600 index was broadly unchanged at 650.84 points by 07:13 GMT after ending the previous session just below record highs.

Technology stocks lead market declines

Technology shares were the weakest performers, with the sector falling 1.6% as semiconductor companies extended the global selloff triggered by concerns that the recent rally in AI-related stocks may have become overstretched.

Chip equipment manufacturer ASML (EU:ASML) and semiconductor producer Infineon (TG:IFX) both declined around 4%.

Siemens Energy (TG:SIE) also came under pressure, falling 5.5% after Barclays downgraded the stock to “underweight” from “equal-weight.”

The weakness followed a negative session in Asia, where Samsung Electronics (USOTC:SSNHZ) shares fell despite issuing strong earnings guidance, while Nasdaq futures were also trading nearly 1% lower, reflecting broader caution towards technology shares.

Defence companies remain in focus

In contrast, European defence stocks edged higher as investors monitored the NATO summit in Turkey, where member states were expected to announce new defence agreements in response to continued pressure from the United States to increase military spending across Europe.

The defence sector has been the strongest performer within the STOXX 600 so far this month.

Swedish defence manufacturer Saab (TG:SDV1) gained 5.3% after Morgan Stanley upgraded the stock to “overweight” from “underweight.”

Shell advances after guidance update

Elsewhere, Shell (LSE:SHEL) rose 2.2% after the energy group modestly increased its outlook for integrated gas production during the second quarter.

FTSE 100 opens steady as Shell upgrades second-quarter trading outlook, Capita addresses pension concerns and Brent crude edges lower.

Market Overview

The FTSE 100 opened broadly unchanged at 10,651.30, while the Euronext 100 edged 0.07 per cent higher and Germany’s DAX slipped 0.21 per cent at the open. Overnight, the Nasdaq closed higher at 26,121.16 and the S&P 500 gained to 7,537.43 as investors balanced improving UK housing data, the start of the NATO summit and expectations for upcoming Federal Reserve policy signals.

Commodity markets were mixed, with copper, gold, Brent crude and natural gas all trading lower at the open, while Bitcoin fell against sterling. Sterling was broadly steady against the major currencies as oil markets continued to weigh renewed Strait of Hormuz security concerns against Saudi price cuts and higher OPEC+ supply expectations.

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Market Numbers

FTSE 100: Down (-0.00%), 10,651.30

Euronext 100: Up (+0.07%), 1,935.63

DAX: Down (-0.21%), 25,764.94

NASDAQ: Up, 26,121.16

S&P 500: Up, 7,537.43

In the Headlines

Trading Update – Shell (LSE:SHEL)

Shell said second-quarter trading and refining performance is expected to be stronger than previously guided, signalling resilient earnings despite ongoing volatility across global energy markets. The update may support investor confidence ahead of the company’s full quarterly results.

Pension Administration – Capita (LSE:CPI)

Capita responded to concerns surrounding its administration of the Civil Service Pension Scheme, seeking to reassure stakeholders over service delivery and operational performance. The update is relevant as investors continue to monitor execution and contract quality across the outsourcing business.

Currencies (vs GBP)

USD: Down (-0.00%), $1.3394

CHF: Up (+0.00%), Fr.1.0784

EUR: Up (+0.00%), €1.1707

JPY: Up (+0.00%), ¥217.113

AUD: Down (-0.03%), $1.9259

Bitcoin (BTC/GBP): Down, £47,131.58

Commodities

Copper: Down

Gold: Down

Brent Crude: Down

Natural Gas: Down

The FTSE 100 traded higher on Tuesday, recovering from the previous session’s losses as investors welcomed an improvement in UK house prices while closely following developments at the NATO summit in Ankara and ongoing tensions in the Middle East.

The UK’s benchmark index gained 0.25% after Monday’s 0.3% decline. Elsewhere in Europe, Germany’s DAX slipped 0.22%, while France’s CAC 40 advanced 0.58%. Sterling edged 0.07% lower against the US dollar to 1.3379.

Fresh housing data showed the UK property market returned to growth in June, with the Lloyds House Price Index recording a 0.2% monthly increase. The average home price rose to £299,330 from £298,812 in May, while annual house price growth edged up to 0.6% from 0.5%. Northern Ireland remained the strongest-performing region, posting annual growth of 7.4%, whereas London recorded a 1.1% year-on-year decline, leaving the average property price at £534,831.

Commenting on the market, Amanda Bryden, Head of Mortgages at Lloyds, said:

“Mortgage rates have eased from their recent highs, offering some encouragement to those considering a move.”

She added:

“The outlook for house prices will depend largely on inflation continuing to ease and household confidence gradually improving.”

Meanwhile, geopolitical risks remained firmly in focus after a tanker caught fire in the Strait of Hormuz following a reported projectile strike, marking the latest disruption to commercial shipping since the outbreak of the conflict between the United States and Iran.

Diplomatic negotiations between Washington and Tehran remained suspended during the funeral period for Iran’s Supreme Leader, Ali Khamenei. Speaking at the White House before departing for Ankara, US President Donald Trump said the United States would prevail in the conflict “one way or the other,” adding that Washington could destroy Iran’s electricity infrastructure in the “small part of an afternoon.”

Attention also turned to the two-day NATO summit in Ankara, where alliance leaders are expected to discuss plans to implement last year’s commitment to increase defence spending from 2% to 3.5% of GDP by 2035. The meeting coincides with a major defence industry exhibition aimed at securing multi-billion-dollar procurement agreements, while President Trump is also expected to hold bilateral talks with the presidents of Ukraine and Syria.

In commodity markets, Brent crude climbed 1.28% to $72.91 a barrel and US West Texas Intermediate crude gained 1.20% to $69.37. Gold prices moved lower, with futures falling 0.63% to $4,141.31 an ounce and spot gold declining 0.84% to $4,129.42.

UK corporate highlights

Shell (LSE:SHEL) increased its guidance for second-quarter integrated gas production, although it cautioned that output will remain well below first-quarter levels following the shutdown of its Pearl GTL facility in Qatar after the Ras Laffan attack.

HSBC (LSE:HSBA) is scaling back higher-risk private credit lending in favour of lower-risk funds, according to a Financial Times report, as concerns grow over underwriting standards in the private credit market.

Investors Prepare for a Busy Week of Economic Events

U.S. stock index futures traded modestly higher on Monday as markets reopened after the Independence Day holiday, with investors looking ahead to a packed schedule of economic releases and comments from Federal Reserve officials.

As of 07:01 GMT, futures on the S&P 500 rose 0.3%, Nasdaq 100 futures gained 0.9%, while Dow Jones futures were little changed.

Attention has shifted to this week’s economic calendar after softer U.S. employment figures released last week reduced expectations of further near-term interest rate increases.

Services Sector Data Takes Centre Stage

The Institute for Supply Management will publish its June non-manufacturing PMI later on Monday, providing an important update on the health of the U.S. services sector.

Economists expect the index to edge down to 54.2 from 54.5 in May. A reading above 50 would continue to signal expansion in the sector, which accounts for the majority of U.S. economic activity.

The release follows last week’s weaker manufacturing survey, which pointed to slower industrial momentum despite continued investment linked to artificial intelligence.

OPEC+ Decision Pushes Oil Lower

Crude prices slipped after OPEC+ announced another increase in production targets beginning in August.

Brent crude traded around $71.86 a barrel, down approximately 0.4%, while U.S. West Texas Intermediate eased about 0.2% to $68.63.

The additional output, together with signs of improving shipping conditions through the Strait of Hormuz, has strengthened expectations of more comfortable global oil supplies during the coming months.

Gold Slips as Dollar Recovers

Gold prices weakened as the U.S. dollar rebounded from recent lows, reducing demand for the precious metal.

The recent rally in bullion had been supported by weaker U.S. jobs data, which encouraged investors to scale back expectations for additional Federal Reserve tightening.

Market participants continue to balance softer labour market trends against persistent inflation pressures when assessing the outlook for U.S. interest rates.

Foxconn Delivers Strong Quarterly Growth

Foxconn (USOTC:FXCOF), officially Hon Hai Precision Industry, reported second-quarter revenue of T$2.513 trillion, a 39.8% increase from a year earlier and well above market expectations.

The company credited continued investment in artificial intelligence infrastructure for driving demand across its cloud and networking businesses, while also reporting solid growth in consumer electronics. Management nevertheless warned that geopolitical uncertainty remains an important risk for the business.

Markets Pause Following Strong Rally

European equity markets traded little changed on Monday, remaining close to record highs after a strong performance last week. Investors adopted a more cautious approach ahead of several important central bank speeches and a series of economic releases expected to provide fresh direction for global markets.

The pan-European STOXX 600 remained close to its all-time high, supported by growing expectations that easing inflation and a softer U.S. labour market could reduce pressure for additional interest rate increases.

Germany’s DAX, France’s CAC 40 and the UK’s FTSE 100 all traded broadly flat in early dealings.

Falling Inflation Expectations Continue to Support Equities

European shares ended last week at record levels, with both the STOXX 600 and Euro Stoxx 50 reaching new highs. Germany’s DAX outperformed, helped by strong gains in major industrial companies, including Siemens, and a widening market rally that extended beyond technology stocks.

Investor sentiment also benefited from weaker-than-expected U.S. employment data, which strengthened expectations that the Federal Reserve could adopt a less aggressive approach to monetary tightening.

Lower oil prices have also eased concerns over energy-driven inflation after geopolitical tensions in the Middle East pushed crude prices higher earlier in the year.

Cyclical sectors such as industrials, manufacturing and financials attracted strong investor inflows throughout the previous week.

Attention Turns to Central Banks

The main focus for investors now shifts to Wednesday’s publication of the minutes from the Federal Reserve’s latest policy meeting.

Markets expect the minutes to retain a relatively hawkish tone, reflecting policymakers’ earlier projections that at least one further interest rate increase could still be delivered this year. However, those forecasts were made before the recent decline in crude oil prices, which may improve the inflation outlook.

Investors will also closely follow comments from Federal Reserve Governor Christopher Waller, European Central Bank President Christine Lagarde, and ECB Executive Board members Isabel Schnabel and Philip Lane for further guidance on the interest rate outlook.

Economic Data to Test Recovery Momentum

This week’s economic calendar will also provide fresh insight into the strength of the Eurozone economy.

Key releases include retail sales and producer price inflation for May across the euro area, together with Germany’s industrial production figures.

The data will help investors assess whether manufacturing activity is beginning to recover and whether consumer demand is showing signs of stabilisation.

easyJet Leads Individual Movers

Among individual companies, easyJet (LSE:EZJ) was one of the strongest performers, rising almost 10% after agreeing in principle to support Castlelake’s proposed takeover offer.

European defense shares posted strong gains on Monday after NATO Secretary-General Mark Rutte said the alliance’s growing military spending is stretching the capacity of defense manufacturers ahead of this week’s NATO summit in Ankara, Turkey.

Italy’s Fincantieri SpA (BIT:FCT) led the sector higher, jumping 12.84% to €12.30 by 08:30 GMT. Other major defense names also advanced, including Leonardo SpA (BIT:LDO), Saab AB (TG:SDV1), Indra Sistemas (TG:IDA), Hensoldt AG (TG:HAG), Rheinmetall AG (TG:RHM), Thales (EU:HO), Dassault Aviation SA (EU:AM) and Safran SA (EU:SAF).

NATO Shifts Focus from Commitments to Implementation

Speaking to The Wall Street Journal ahead of the summit, Rutte said NATO has entered a new phase in its defense spending programme.

“A year ago was all about promises” of additional military spending, he said. This year, “it’s about delivery,” reflecting the alliance’s focus on turning commitments into operational capability.

According to NATO, military expenditure by member states excluding the United States rose 20% last year compared with 2024, reaching $574 billion. Data from the Stockholm International Peace Research Institute showed Germany increased defense spending by 24% to $114 billion, with Berlin aiming to raise that figure to around $180 billion by 2029.

Production Capacity Becoming a Constraint

Rutte warned that the rapid increase in defense orders is putting significant pressure on manufacturers, noting that around $300 billion worth of weapons has already been ordered from U.S. suppliers.

“We are basically reaching the absorption-capacity level,” he said, identifying limited industrial production and difficulties recruiting and training military personnel as the two principal constraints.

U.S. Ambassador to NATO Matthew Whitaker also argued that Europe’s defense industry would benefit from greater consolidation, saying higher military budgets must result in additional equipment rather than higher costs.

Summit Expected to Generate New Defense Contracts

TD Cowen said this week’s NATO summit will focus on military spending, industrial production capacity and continued support for Ukraine, with U.S. President Donald Trump expected to press allies on burden-sharing and implementation of NATO’s target of spending 5% of GDP on defense.

The broker expects fresh investment announcements and new defense contracts linked to the summit, developments that could further support U.S. foreign military sales, which are already running at record levels.

TD Cowen also identified drones and counter-drone technologies as the most attractive area for future defense spending, citing a lasting shift in modern warfare and the growing need to protect critical infrastructure.

The NATO summit takes place on 7-8 July in Ankara, alongside a dedicated defense industry forum where officials are expected to announce new contracts, preliminary agreements and joint-production initiatives.

UK equities traded modestly higher on Monday as investors assessed geopolitical developments in Ukraine and Iran alongside the latest OPEC+ production decision and a busy domestic news agenda. Market participants also kept a close watch on political developments ahead of a key NATO summit and fresh UK economic data.

As of 07:15 GMT, the FTSE 100 was up 0.26%. Germany’s DAX slipped 0.02%, while France’s CAC 40 gained 0.30%. Sterling eased 0.11% against the U.S. dollar to $1.3338.

Ukraine and Iran Remain in Focus

Russian President Vladimir Putin and U.S. President Donald Trump held a telephone conversation lasting almost 90 minutes on Sunday, according to Russia’s foreign ministry, marking their fourth discussion this year.

The ministry said Trump “reaffirmed his readiness to facilitate the earliest possible cessation of hostilities” in Ukraine and described the talks as “businesslike and highly constructive.”

Separately, Ukrainian President Volodymyr Zelensky said he had a “very good call” with Trump on Saturday, adding, “There is a real prospect to put an end to this war, and America’s resolve is decisive.” The discussions came ahead of a NATO summit opening in Turkey on Tuesday, which Trump is expected to attend.

Meanwhile, Iran began a 12-hour funeral procession in Tehran for the country’s late Supreme Leader, Ayatollah Ali Khamenei, marking the third day of national mourning.

His successor, Mojtaba Khamenei, has not appeared publicly since the 28 February airstrike that killed his father. Iranian officials have said he was injured in the attack and has communicated only through written statements. Public life across Tehran has been heavily disrupted during the mourning period, which is scheduled to conclude with Ayatollah Khamenei’s burial in Mashhad on Thursday.

UK Political and Oil Market Developments

In UK politics, Makerfield MP Andy Burnham, widely viewed as a potential successor to Prime Minister Keir Starmer, ruled out calling an early general election if he were to become prime minister.

“No. As I said in my speech on Monday, I’m going to work to the 2024 manifesto,” Burnham said in response to a question on Reddit. He also indicated he would seek to move Labour towards electoral reform in its next manifesto.

Conservative leader Kemi Badenoch criticised Burnham’s decision to answer questions on Reddit rather than holding a traditional media briefing, urging him to “face a proper press conference.”

Elsewhere, seven OPEC+ members—Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman—agreed to increase combined oil production by 188,000 barrels per day from August, marking the fifth consecutive monthly output increase.

Brent crude futures for September delivery fell 0.42% to $71.82 a barrel, while U.S. WTI crude for August delivery slipped 0.32% to $68.47. Gold futures for August rose 0.91% to $4,162.51 an ounce, although spot gold declined 0.60% to $4,150.56.

UK Corporate Round-Up

easyJet (LSE:EZJ) agreed in principle to support a proposed £5.5 billion takeover by U.S. investment firm Castlelake at £6.90 per share, a transaction that could significantly reshape the European airline sector.

Ocado (LSE:OCDO) confirmed that founder Tim Steiner will remain chief executive until the start of 2028 before moving into a Founder role through 2029 as part of a planned leadership succession.

ITV (LSE:ITV) agreed to sell its Media and Entertainment division to Sky in a deal worth up to £1.6 billion, allowing ITV Studios to become a standalone content production business while adding Love Productions to its portfolio.

Separately, the Society of Motor Manufacturers and Traders reported that UK new car registrations increased by around 11% year on year in June, with battery electric vehicles accounting for 30% of all new registrations.

Markets opened steady as easyJet backed Castlelake’s takeover terms and ITV agreed a £1.6bn Sky deal, while Brent crude edged lower.

Market Overview

UK markets opened little changed, with the FTSE 100 broadly flat, while the Euronext 100 and Germany’s DAX edged higher. Investors continued to monitor developments surrounding Ukraine and Iran alongside expectations for upcoming Federal Reserve minutes and comments from central bank policymakers. European equities remained close to record levels despite a cautious tone. Oil prices softened after OPEC+ agreed to raise output targets. US markets were closed on Friday for the Independence Day holiday.

In commodities, copper strengthened while gold, Brent crude and natural gas all edged lower. Bitcoin fell against sterling. Currency markets were broadly steady, with sterling little changed against the US dollar, euro, Swiss franc, Japanese yen and Australian dollar.

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Market Numbers

FTSE 100: Up (0.00%), 10,679.38

Euronext 100: Up (0.03%), 1,939.03

DAX: Up (0.13%), 25,811.91

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In the Headlines

Takeover Terms – easyJet (LSE:EZJ)

easyJet has agreed in principle to support a recommended £6.90-per-share takeover proposal from Castlelake, subject to due diligence and final documentation. The agreement represents a significant step towards a potential acquisition, although no firm offer has yet been made.

Strategic Restructure – ITV (LSE:ITV)

ITV has agreed to sell its Media business to Sky in a transaction valued at up to £1.6 billion, allowing ITV Studios to operate as a standalone global content company. The deal reshapes the UK broadcasting landscape while enabling ITV to focus on content production and return capital to shareholders.

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Currencies (vs GBP)

USD: Unchanged (0.00%), $1.3353

CHF: Unchanged (0.00%), Fr.1.0733

EUR: Unchanged (0.00%), €1.1675

JPY: Unchanged (0.00%), ¥215.5955

AUD: Up (0.02%), $1.9249

Bitcoin (BTC/GBP): Down, £47,218.88

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Commodities

Copper: Up

Gold: Down

Brent Crude: Down

Natural Gas: Down

FTSE 100 opens steady as European markets rise. Craneware cuts FY26 outlook, Strategic Minerals advances Redmoor, while Brent crude edges higher.

Market Overview

UK markets opened mixed, with the FTSE 100 edging slightly lower to 10,652.81, while the Euronext 100 gained 0.02 per cent to 1,921.52 and Germany’s DAX advanced 0.75 per cent to 25,772.81. Overnight, the Nasdaq closed lower at 25,832.67, while the S&P 500 finished broadly unchanged at 7,483.24. Market sentiment was supported by weaker US payroll data and easing geopolitical concerns following progress in Iran-related discussions, although investors remained cautious ahead of further economic data.

Commodity markets were mixed, with copper and Brent crude higher while gold and natural gas eased. Bitcoin rose slightly against sterling. Currency markets were largely flat versus the pound, reflecting limited movement as investors weighed improving supply expectations in the oil market alongside a softer US economic backdrop.

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Market Numbers

FTSE 100: Down (-0.001%), 10,652.81
Euronext 100: Up (+0.02%), 1,921.52
DAX: Up (+0.75%), 25,772.81
NASDAQ: Down, 25,832.67
S&P 500: Up, 7,483.24

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In the Headlines

FY26 Outlook Warning – Craneware (LSE:CRW)

Craneware warned that its financial performance for FY26 will fall below market expectations after delays in recognising revenue from eligible 340B drug activity and the deferral of several enterprise contracts. The company said customer demand remains strong and described the setback as a timing issue rather than a deterioration in underlying business conditions.

Cornwall Drilling Approval – Strategic Minerals (LSE:SML)

Strategic Minerals has received approval for a major drilling programme at the Redmoor tungsten, tin and copper project in Cornwall. The campaign is intended to expand the project’s resource base and marks an important step in advancing Redmoor towards future development.

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Currencies (vs GBP)

USD: Unchanged (0.00%), $1.33381
CHF: Unchanged (0.00%), Fr.1.07297
EUR: Unchanged (0.00%), €1.1677
JPY: Unchanged (0.00%), ¥215.355
AUD: Unchanged (0.00%), $1.92887
Bitcoin (BTC/GBP): Up, £46,180.40

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Commodities

Copper: Up
Gold: Down
Brent Crude: Up
Natural Gas: Down