Category: Top Story

European markets traded modestly lower on Thursday as investors assessed a fresh wave of corporate earnings against a backdrop of heightened geopolitical uncertainty.

At 08:02 GMT, Germany’s DAX was down 0.3%, France’s CAC 40 eased 0.2%, and the UK’s FTSE 100 declined 0.2%.

Earnings updates dominate

The reporting calendar remains busy, with the season broadly constructive so far — roughly 60% of European companies have exceeded profit expectations to date.

Pernod Ricard (EU:RI) posted a 5% drop in second-quarter like-for-like sales, reflecting continued weak consumer demand and inventory reductions in the United States and China. However, the decline was less severe than the 7.6% contraction recorded in the prior quarter, supported by stronger trends in India and global travel retail.

Rio Tinto (LSE:RIO) delivered flat underlying earnings for 2025, as higher copper and aluminium volumes and tighter cost discipline offset softer iron ore prices.

Renault (EU:RNO) reported a net loss of €10.93 billion for 2025 after booking a €9.3 billion non-cash accounting charge tied to a revised treatment of its Nissan stake. Underlying operations remained resilient, with revenue rising 3%.

Nestlé (BIT:1NESN) announced a 17% decline in annual net profit and a sharp margin contraction in 2025, as restructuring costs, asset impairments and a December infant formula recall weighed on results.

Zurich Insurance (TG:ZFIN) achieved a record operating profit of $8.9 billion for 2025, up 14% year on year, driven by improved underwriting in property and casualty and growth across its business segments.

Airbus Group (EU:AIR) reported a slightly better fourth-quarter profit but issued a softer-than-expected aircraft delivery forecast for 2026 due to engine supply constraints.

Air France-KLM (EU:AF) posted its first-ever operating result above €2 billion, with revenue gains and lower fuel costs offsetting higher airport fees and labour expenses.

Krones (TG:KRN) exceeded profitability expectations in the fourth quarter, though revenue slightly missed forecasts, as the German packaging equipment maker continued to expand margins despite macroeconomic headwinds.

Geopolitical tensions remain elevated

Beyond earnings, geopolitical risks continue to influence sentiment. Ukrainian and Russian negotiators held their third U.S.-brokered meeting of 2026 this week, but talks failed to produce progress on core disputes, including territorial issues.

Russia is reportedly demanding that Ukraine withdraw from the remaining 20% of the eastern Donetsk region not under Moscow’s control — a condition Kyiv rejects.

Meanwhile, nuclear negotiations between the United States and Iran in Geneva yielded limited progress. U.S. Vice President JD Vance said Washington was considering whether to continue diplomatic engagement with Tehran or pursue “another option”.

Satellite imagery suggests Iran has constructed a reinforced concrete structure at a sensitive military site, later covered with soil, potentially advancing work at a location reportedly targeted by Israel in 2024.

Oil prices extend gains

Oil prices continued to climb, supported by rising geopolitical risks in the Middle East that have heightened concerns about potential supply disruptions.

Brent crude rose 1% to $71.04 per barrel, while U.S. West Texas Intermediate gained 1.1% to $65.75 per barrel.

Both benchmarks had surged more than 4% on Wednesday, marking their highest closing levels since January 30.

Reports of increased military and naval activity in the Persian Gulf have reinforced fears of supply vulnerability. At the same time, hopes for relaxed sanctions on Russian energy exports faded after the latest Russia-Ukraine talks failed to produce a breakthrough.

Additional support came from industry data showing tighter U.S. supply conditions. The American Petroleum Institute reported a decline of around 609,000 barrels in U.S. crude inventories for the week ending February 13. Official figures from the Energy Information Administration are due later Thursday.

UK equities edged lower on Thursday, ending their recent upward streak as the FTSE 100 opened in negative territory, tracking weaker sentiment across European markets. The pound held broadly firm.

By 08:25 GMT, the FTSE 100 was down 0.4%, while sterling ticked up 0.07% against the dollar to 1.3513. On the continent, Germany’s DAX slipped 0.3% and France’s CAC 40 declined 0.4%.

UK market round-up

Rio Tinto (LSE:RIO) reported underlying earnings of $10.87 billion for 2025, flat year on year but ahead of analyst forecasts, despite softer iron ore prices. The mining giant offset pricing pressure through higher copper and aluminium volumes as well as tighter cost control. The figure topped Bloomberg expectations of $10.81 billion. However, net profit attributable to shareholders fell 14% to $9.97 billion, reflecting higher debt levels and one-off acquisition-related items.

Centrica PLC (LSE:CNA), owner of British Gas, posted a statutory loss of £72 million for 2025, compared with a £1.33 billion profit the previous year. The company suspended its share buyback programme as adjusted earnings more than halved due to lower energy prices impacting gas and nuclear returns. Results were weighed down by £508 million in impairments across nuclear and gas assets and a £345 million net loss on derivative energy contracts.

Mondi PLC (LSE:MNDI) recorded a 3% increase in annual revenue to €7.7 billion, supported by stronger volumes and the Schumacher acquisition. However, underlying EBITDA declined 5% to €1,001 million amid margin compression, with the EBITDA margin narrowing to 13.1% from 14.1% a year earlier.

Ab Dynamics (LSE:ABDP) appointed Andrew Lewis as interim Chief Financial Officer with immediate effect, as the company continues its search for a permanent CFO following Sarah Matthews-DeMers’ promotion to CEO. The recruitment process is progressing, though notice periods have necessitated a temporary appointment.

According to a Bloomberg report, Elliott Investment Management is urging London Stock Exchange Group PLC (LSE:LSEG) to review its portfolio and initiate a £5 billion ($6.8 billion) share buyback over the next year. The activist fund is reportedly calling for a reassessment of LSEG’s structure, which spans data services, exchange operations and a 51% stake in Tradeweb Markets Inc.

Safestore Holdings Plc (LSE:SAFE) delivered 6.3% year-on-year revenue growth at constant exchange rates in the first quarter, driven by both like-for-like gains and contributions from new stores. Like-for-like revenue rose 4.2% to £31.66 per square foot, while closing occupancy reached 77.8%, up one percentage point from last year and approaching the 80% threshold often associated with stronger growth momentum.

Debenhams Group (LSE:DEBS) raised £40 million through an oversubscribed equity placing. The online retailer completed the issue at 18 pence per share, a 5% discount to the 19 pence closing price on 17 February. The company placed 200 million new shares and secured subscriptions for a further 22.2 million, resulting in net proceeds of around £38.7 million.

Capita plc (LSE:CPI) announced a £137 million contract renewal within its Pension Solutions division, extending an existing UK client relationship for up to 10 years from Q1 2026. The agreement will see Capita deploy new technology to enhance transaction efficiency, increase capacity and improve customer experience.

European markets traded broadly higher on Wednesday, supported by signs of easing geopolitical strain and fresh reports suggesting a potential leadership change at the European Central Bank.

According to the Financial Times, ECB President Christine Lagarde is considering stepping down before the end of her eight-year term, which is due to run through October 2027.

In currency markets, the British pound slipped below $1.36 after new figures showed U.K. inflation cooled to a ten-month low in January, bolstering expectations that the Bank of England could begin cutting rates as early as March.

Data from the Office for National Statistics showed consumer prices rose 3.0% year over year, in line with forecasts. That marked the slowest pace since March 2025, when inflation stood at 2.6%, and followed a 3.4% annual increase in December.

In France, annual consumer price growth also moderated, easing to 0.4% in January and matching the preliminary estimate released earlier this month.

By midday, the U.K.’s FTSE 100 was higher by 1.0%, Germany’s DAX had gained 0.8%, and France’s CAC 40 was up 0.3%.

Among individual stocks, defense contractor BAE Systems (LSE:BA.) rallied strongly after posting a 12% increase in full-year operating profit that exceeded expectations and announcing higher shareholder returns.

Commodity giant Glencore (LSE:GLEN) also climbed despite reporting a decline in annual earnings.

Swiss dental implant specialist Straumann Holding (TG:QS51) jumped after surpassing fourth-quarter sales forecasts and guiding for high single-digit percentage revenue growth in 2026.

On the downside, Carrefour (EU:CA) fell after Europe’s largest food retailer reported lower operating profit for 2025, citing costs related to recent acquisitions.

European equities moved modestly higher on Wednesday as investors assessed another batch of corporate results alongside data showing a marked slowdown in U.K. inflation.

At 08:15 GMT, Germany’s DAX climbed 0.7%, France’s CAC 40 added 0.5%, and London’s FTSE 100 rose 0.5%.

Earnings season supports sentiment

Markets in Europe took cues from slight overnight gains on Wall Street, despite ongoing debate about stretched valuations tied to artificial intelligence and its broader economic implications.

The quarterly reporting season remains central to investor sentiment. So far, results have been broadly encouraging: roughly 60% of European companies have exceeded earnings forecasts, compared with a historical average of 54% beating expectations in a typical quarter, according to LSEG data.

Among individual movers, miner Glencore (LSE:GLEN) posted a decline in full-year earnings, as elevated copper prices were insufficient to counter weaker profits from its coal division.

Defense contractor BAE Systems (LSE:BA.) increased shareholder returns after booking record defense orders, supported by rising military expenditure across Europe and the United States.

Straumann Group (TG:QS51) topped fourth-quarter revenue forecasts and reported margins consistent with guidance. However, the dental implants maker flagged ongoing weakness in China and warned that currency headwinds could weigh on reported earnings in 2026.

Castellum (AMEX:CTM) swung to a net loss in the fourth quarter due to negative property revaluations, although the Nordic real estate group continued to grow income from property management operations.

U.K. inflation eases

Fresh data showed Britain’s annual inflation rate slowed in January to its lowest level since March of last year, strengthening expectations of a rate cut from the Bank of England in the coming month.

Consumer prices increased 3.0% year over year, down from 3.4% in December, according to the Office for National Statistics.

While inflation remains above the BoE’s 2% target, policymakers anticipate a sharper decline toward that level in April, as last year’s increases in utility bills and other regulated tariffs drop out of the annual comparison.

Market participants largely expect the central bank to lower its benchmark rate to 3.5% in March, following a narrowly split decision in February to leave rates unchanged.

In France, inflation also moderated, with consumer prices rising 0.4% annually in January compared with 0.7% the previous month.

Oil prices rebound

Crude prices ticked higher on Wednesday after steep losses in the prior session, as reports of progress in U.S.-Iran nuclear negotiations reduced concerns about potential supply disruptions.

Brent futures rose 0.5% to $67.74 per barrel, while U.S. West Texas Intermediate crude gained 0.5% to $62.54 per barrel. On Tuesday, Brent had fallen nearly 2% and WTI dropped 1%.

According to reports, Washington and Tehran reached agreement on key “guiding principles” during talks on Tuesday, fueling hopes of a deal that could ultimately allow more Iranian oil onto global markets.

The discussions are closely monitored by energy traders, given Iran’s status as a significant oil producer and its position along the Strait of Hormuz, a critical chokepoint through which about one-fifth of global oil consumption flows daily.

London equities opened modestly higher on Wednesday after fresh data showed UK inflation slowed in January, strengthening expectations that the Bank of England could deliver interest rate cuts in both March and June. Sterling also steadied, clawing back some losses after a sharp drop in the previous session.

By 0806 GMT, the benchmark FTSE 100 was up 0.4%. The pound edged 0.01% higher against the dollar to 1.3560, recovering following Tuesday’s slide triggered by weaker labour market figures.

Elsewhere in Europe, Germany’s DAX gained 0.5%, while France’s CAC 40 advanced 0.3%.

UK roundup

Official figures showed Britain’s annual inflation rate cooled to 3.0% in January from 3.4% in December, bolstering the case for a rate reduction at the Bank of England’s next policy meeting in March. December’s reading had ticked up from 3.2% in November, marking the first increase in five months.

On a monthly basis, consumer prices fell 0.5%, reversing a 0.4% rise in December. Core CPI, which excludes volatile food and energy costs, declined 0.6% month over month and eased to 3.1% year on year from 3.2% previously.

ING’s UK economist James Smith described the inflation data as “a bit of a mixed bag,” noting that while food inflation is down sharply, services inflation remains stickier. Smith added that “the real action will come in April” when headline and services inflation figures could make the Bank “more comfortable with the inflation outlook.”

Corporate focus

Shares of BAE Systems (LSE:BA.) were in focus after the defence group lifted its dividend following record order intake, driven by higher military spending across Europe and the United States.

The company proposed a final dividend of 22.8 pence, taking the full-year payout to 36.3 pence, a 10% increase. It also bought back 30 million shares during the year at a cost of £502 million.

Meanwhile, Glencore (LSE:GLEN) posted a 6% drop in full-year core earnings, as strength in copper prices failed to offset weaker profitability in its coal division. Adjusted EBITDA came in at $13.5 billion, while revenue rose 7% to $247.5 billion. Adjusted EBIT fell 14% to $6 billion, and earnings per share were $0.03.

Separately, YouGov Plc (LSE:YOU) confirmed the appointment of Ian Griffiths as permanent chair. Griffiths, who joined the board in September 2025, succeeds Deborah Davis, who had served in the role on an interim basis since February 2025.