Category: Market Summary

British equities opened with little direction on Monday, fluctuating between gains and losses as geopolitical uncertainty weighed on sentiment. Iran has put forward a proposal to reopen the Strait of Hormuz and de-escalate its conflict with the United States, though markets remain cautious as Washington has yet to indicate whether it will engage.

By 07:14 GMT, the FTSE 100 was marginally lower by 0.01%, while sterling traded broadly flat against the dollar at 1.3542. In Europe, the DAX rose 0.3% and the CAC 40 gained 0.3%.

According to Axios, Iran’s proposal—delivered to Washington through Pakistani intermediaries—would reopen the vital shipping route and either extend or make permanent a ceasefire, with nuclear negotiations postponed to a later stage.

The initiative attempts to bypass a major sticking point, as divisions persist within Iran’s leadership over potential nuclear concessions, particularly in response to U.S. demands for Tehran to halt uranium enrichment for at least a decade and export its stockpile.

The White House confirmed it had received the proposal but gave no indication of further engagement, stating the US “will only make a deal that puts the American people first.”

Donald Trump is expected to chair a Situation Room meeting on Iran later on Monday with senior national security and foreign policy officials.

Iranian Foreign Minister Abbas Araghchi led a series of diplomatic efforts over the weekend, travelling between multiple capitals. He visited Islamabad twice, briefing mediators from Pakistan, Egypt, Turkey, and Qatar, and relayed the proposal to Washington via Pakistan.

He then travelled to Muscat for discussions with Omani officials regarding safe transit through the Strait of Hormuz, before heading to St. Petersburg on Monday for talks with Vladimir Putin, focusing on coordination in response to the US-Israeli campaign.

Trump signalled limited urgency, stating Iranian leaders “can come to us or they can call us,” after cancelling a planned Islamabad visit by his envoys. Meanwhile, CENTCOM reported that 38 vessels turned back from Iranian waters over the weekend.

UK Roundup

Close Brothers Group plc (LSE:CBG) joined Barclays plc (LSE:BARC), Lloyds Banking Group plc (LSE:LLOY) and Banco Santander (LSE:BNC) in accepting the FCA’s £9.1 billion car finance redress scheme without pursuing legal action, as remaining lenders faced a Monday deadline to decide their position.

Intertek Group plc (LSE:ITRK) rejected a second takeover proposal from EQT AB, dismissing an improved £54-per-share offer—valuing the business at £8.3 billion—as insufficient. EQT has until 14 May to either formalise its bid or withdraw under Takeover Code rules.

Edinburgh Worldwide Investment Trust plc (LSE:EWI) offered shareholders a tender exit ahead of Wednesday’s AGM, where activist investor Saba Capital—which holds more than 20% of the trust—is seeking to appoint three board representatives. The outcome of the vote remains uncertain.

European equities traded slightly lower on Friday as investors reacted to limited signs of progress between the U.S. and Iran in easing tensions across the Middle East.

The Strait of Hormuz remained largely shut, keeping oil prices elevated and fuelling concerns that the conflict could drag on longer than markets had anticipated.

A report from the Wall Street Journal indicated that the U.S. military may require up to six years to rebuild missile stockpiles used during the conflict with Iran.

The CAC 40 slipped 0.4%, while the FTSE 100 declined 0.3%. In contrast, Germany’s DAX edged up 0.2%.

Corporate Movers

Electrolux (LSE:0GQ1) shares dropped sharply after the company unexpectedly reported a first-quarter loss, driven by increased tariff costs in the United States.

Mondi (LSE:MNDI) also fell after posting a steep decline in first-quarter profit.

Evotec (TG:EVT) moved lower following the resignation of CFO Paul Hitchin for personal reasons.

On the upside, SAP (TG:SAP) surged after delivering first-quarter profit above expectations.

Eni (BIT:ENI) gained after announcing a roughly 90% increase to its 2026 share buyback programme.

Meanwhile, J Sainsbury (LSE:SBRY) advanced after unveiling a share repurchase plan of up to £300 million.

European equity markets moved lower on Friday as fading optimism over a swift resolution to the Iran conflict and ongoing concerns about oil supply disruptions weighed on sentiment.

By 07:04 GMT, the Stoxx Europe 600 was down 0.4%. Germany’s DAX slipped 0.1%, France’s CAC 40 lost 0.4%, and the UK’s FTSE 100 also declined by 0.4%.

Fragile Ceasefires and Rising Tensions

Donald Trump announced on Thursday that a ceasefire between Israel and Lebanon would be extended by three weeks following discussions with officials from both nations. However, the absence of Hezbollah representatives from the talks has raised doubts about how durable the agreement will be.

Earlier in the week, Trump also introduced an open-ended ceasefire arrangement between the U.S. and Iran, while maintaining restrictions on Iranian ports.

Uncertainty continues to surround the situation. Iran responded to the U.S. measures by asserting control over the Strait of Hormuz—through which around one-fifth of global oil supplies pass—targeting several vessels in the area. In response, the U.S. has seized Iranian-flagged ships, and Trump stated he had instructed the Navy to “shoot and kill” Iranian boats attempting to deploy mines in the strait.

Oil Prices Climb Above $100

With little indication that the Strait of Hormuz will reopen in the near term, oil prices have climbed back above $100 per barrel. This has intensified concerns about rising inflation and the potential impact on global economic growth.

Earnings in Focus

Alongside geopolitical developments, investors are also monitoring corporate results across Europe.

Shares of SAP (TG:SAP) rose more than 5% after the company reported a 17% increase in first-quarter profit, exceeding market expectations, supported by strong performance in its cloud business.

The FTSE 100 opened lower on Friday, with investor sentiment dampened by elevated oil prices and ongoing geopolitical tensions in the Middle East, overshadowing stronger-than-expected UK retail data.

By 07:18 GMT, the UK’s benchmark index had declined 0.5%, while sterling edged down 0.04% against the US dollar to 1.3468. Elsewhere in Europe, Germany’s DAX slipped 0.14%, and France’s CAC 40 dropped 0.7%, reflecting broader caution across regional markets.

Concerns intensified after Donald Trump signalled there was no immediate urgency to resolve tensions with Iran, raising expectations of a prolonged standoff. He indicated that Iran’s military and economic capabilities had been significantly weakened and stated that the United States would continue to exert control over the Strait of Hormuz until an agreement is reached, while also leaving open the possibility of further military action. These developments have heightened fears of ongoing disruption to global energy supplies.

Oil prices remained near recent highs following a sharp rally earlier in the week, supported by concerns over supply constraints linked to the Strait of Hormuz. The waterway, historically responsible for roughly one-fifth of global oil shipments, has experienced reduced traffic amid heightened military activity, adding to worries about sustained upward pressure on energy costs.

UK Retail Sales Surprise to the Upside

Data from the Office for National Statistics showed that UK retail sales rose by 0.7% in March, exceeding expectations for a more modest increase. On an annual basis, sales grew by 1.7%.

However, underlying trends remained mixed. Core retail sales excluding fuel posted only modest growth and fell short of yearly forecasts, suggesting that while headline figures were encouraging, consumer demand remains uneven.

European equities traded unevenly on Thursday as investors assessed a wave of corporate earnings while closely monitoring developments in the Middle East conflict. A senior Iranian lawmaker said Tehran has already transferred initial toll revenues from the Strait of Hormuz into the country’s central bank.

At the same time, reports indicate the Pentagon has told U.S. lawmakers that clearing naval mines allegedly deployed by Iran could take as long as six months.

Economic signals remain mixed

On the macroeconomic front, a survey revealed that business activity in the Eurozone unexpectedly fell into contraction territory in April, weighed down by higher energy costs and weaker demand in the services sector.

In the U.K., government data showed an improvement in public finances. The budget deficit narrowed in March to its lowest level for that month since 2022, according to the Office for National Statistics.

Public sector net borrowing declined by GBP 1.4 billion to GBP 12.6 billion, marking the lowest March figure in three years.

Major indices diverge

Among key European benchmarks, France’s CAC 40 rose 0.5%, while Germany’s DAX slipped 0.2% and the U.K.’s FTSE 100 fell 0.6%.

Company highlights

WH Smith (LSE:SMWH) dropped 10% after issuing a profit warning, citing a sharp decline in first-half earnings and suspending its dividend amid Middle East uncertainty.

ASOS (LSE:ASC) gained 2.3% after reporting a narrower first-half loss and reaffirming its full-year outlook.

J Sainsbury (LSE:SBRY) fell 5.2% after warning that profits could decline this year.

German automakers BMW (TG:BMW), Mercedes-Benz (TG:MBG), and Volkswagen (TG:VOW3) traded lower despite strong growth in European car registrations in March.

Renault (EU:RNO) rose 1.5% after reporting first-quarter sales above expectations.

Safran (EU:SAF) added 1% following better-than-expected first-quarter revenue.

Orange (EU:ORA) surged 4% after raising its full-year earnings outlook.

Sanofi (EU:SAN) climbed 3.5% after delivering stronger-than-expected revenue and operating profit in the first quarter.

Sartorius (EU:DIM) dropped nearly 5% after reporting a decline in underlying net profit.

Nestlé (BIT:1NESN) jumped 7% after exceeding first-quarter forecasts, supported by strong demand for coffee and pet care products.

Nokia (NYSE:NOK) surged more than 9% after quarterly profit jumped 54%, driven by strong demand for its AI-related business.

Heineken (EU:HEIA) fell 2.3% after reporting another decline in beer volumes during the quarter.

STMicroelectronics (BIT:STMMI) advanced 8.5% after first-quarter revenue beat expectations.

European equities moved modestly lower on Thursday as investors remained cautious amid persistent tensions around the Strait of Hormuz, despite U.S. President Donald Trump extending the Iran ceasefire indefinitely.

As of 07:05 GMT, the pan-European Stoxx 600 was down 0.4%, Germany’s DAX had slipped 0.5%, and the U.K.’s FTSE 100 declined 0.6%.

France’s CAC 40 stood out, rising 0.3%, supported by strong gains in L’Oréal (EU:OR), which reported its fastest quarterly growth in two years. The stock jumped more than 8%, even as concerns persisted about the potential impact of the Iran conflict on consumer demand.

Market participants were also watching for signs of renewed diplomacy between Washington and Tehran. Trump told U.S. media that fresh negotiations are “possible” as early as Friday.

Earlier in the week, the president said in a social media post that the ceasefire had been extended just hours before its expected expiry, following a request from Pakistan, which has been acting as an intermediary. Trump added that the truce would remain in place “until such time as” Iran delivers a “unified proposal” for peace.

Still, prospects for talks remained uncertain. Shortly after the announcement, Iran attacked three vessels and seized two near the Strait of Hormuz, in response to an ongoing U.S. blockade of its ports and coastline.

Concerns over potential supply disruptions through the strait—responsible for roughly 20% of global oil flows—pushed crude prices back above $100 per barrel. Although prices have retreated from the sharp surge seen after the conflict began in late February, they remain elevated compared with pre-war levels.

Investors are also awaiting Eurozone business activity data later in the day, which could provide insight into how companies are coping with energy-related pressures.

Earnings deluge

Some analysts noted that markets may be shifting focus away from the steady stream of geopolitical developments and turning instead toward corporate earnings and increased spending on artificial intelligence infrastructure.

Shares in Essity (BIT:1ESSI) rose after the group reported quarterly core earnings above expectations, supported by higher volumes that helped offset weaker pricing. The company’s CEO told Reuters it plans to raise prices to counter rising energy costs.

However, Sainsbury’s (LSE:SBRY) warned that the conflict could dampen consumer spending, weighing on its outlook. Its shares fell more than 5%.

In contrast, Safran (EU:SAF) edged higher after posting stronger-than-expected first-quarter revenue and reaffirming its 2026 outlook.

Meanwhile, Sanofi (LSE:SAN) also exceeded forecasts for both profit and revenue in the first quarter, driven by continued demand for its asthma and eczema treatment Dupixent, lifting the stock by over 2%.

British equities started Thursday on a weaker footing as ongoing geopolitical strain in the Middle East continued to dampen investor sentiment, with little indication of progress toward renewed U.S.-Iran negotiations.

By 07:11 GMT, the FTSE 100 was down 0.6%. Germany’s DAX fell 0.4%, while France’s CAC 40 edged up 0.4%. Sterling also softened, with GBP/USD slipping 0.1% to 1.3495.

Tensions remained high after Iran seized several vessels in the Strait of Hormuz earlier in the week. Meanwhile, the United States maintained its naval blockade of Iranian ports and continued targeting Iran-linked shipping in regional waters.

Traffic through the strait—accounting for around 20% of global oil supply—remained heavily restricted.

Although U.S. President Donald Trump announced an indefinite extension of the ceasefire, prospects for a diplomatic breakthrough appeared slim.

Washington has insisted on the full reopening of the Strait of Hormuz as a condition for any agreement, while Iran has refused to enter talks under ongoing blockade conditions, leaving negotiations at a standstill.

Iranian President Masoud Pezeshkian said Tehran remains willing to engage, but emphasized that “breach of commitments, blockade and threats” are the key barriers to meaningful dialogue, underscoring the country’s position that current conditions rule out genuine negotiations.

Iranian officials also placed responsibility on Washington for the stalemate, warning that reopening the strait would be “impossible” as long as military and economic pressure continues.

The standoff has increased uncertainty around how long the ceasefire can hold, even though it has so far extended beyond its initial timeframe.

Oil prices moved higher amid the disruption. Brent crude climbed 1.5% to $103.42 per barrel, while West Texas Intermediate gained nearly 1.6% to $94.48, supported by constrained supply and reduced shipping activity.

UK round up

London Stock Exchange Group (LSE:LSEG) said it expects full-year revenue growth toward the top end of its 6.5%–7.5% guidance after first-quarter income rose 9.8%, surpassing analyst forecasts on strong performance in its data and analytics division.

CEO David Schwimmer pointed to solid momentum and continued AI deployment, even as the company faces pressure from activist investor Elliott Management to enhance valuation and performance.

Sainsbury’s (LSE:SBRY) cautioned that the Iran conflict could impact consumer demand and profitability, projecting 2026/27 underlying operating profit in the range of £975 million to £1.08 billion amid elevated uncertainty.

The retailer, echoing Tesco, said its greater exposure to non-food sales makes it more sensitive to any pullback in discretionary spending, despite a strong start to the year.

WH Smith (LSE:SMWH) lowered its full-year profit outlook to £90 million–£105 million and suspended its dividend, citing weaker passenger volumes and softer consumer confidence linked to Middle East travel disruption.

The company warned that airport sales are likely to come under pressure as higher jet fuel costs drive up airfares, while it adopts a cautious stance to conserve cash and reinforce its balance sheet.

Asos (LSE:ASC) said it is pursuing refunds on £7 million in U.S. tariffs as part of efforts to protect margins during its turnaround, after the levies were deemed unlawful by the Supreme Court.

The retailer, already dealing with competitive pressures and subdued demand, warned that broader geopolitical risks—including the Iran conflict—could further impact costs and consumer spending.