Category: Top Story

European markets weakened as Pets at Home profits fell and BP faced governance scrutiny, while Brent crude and gold moved lower.

Market Overview

European markets moved lower at the open, with the FTSE 100 down 0.27 per cent, the CAC 40 falling 1.03 per cent and the DAX declining 0.80 per cent as investors assessed weaker corporate updates and ongoing geopolitical developments. In the US, sentiment remained firmer overnight, with the Nasdaq rising 0.30 per cent and the S&P 500 adding 0.19 per cent. Markets also continued to monitor oil price stability following signs of progress in US-Iran discussions, while UK retail and consumer data pointed to continued pressure on discretionary spending.

Commodity markets were mixed, with Brent crude easing as traders weighed supply expectations against Middle East risks. Gold and copper both softened, reflecting cautious sentiment around global growth expectations. Sterling was broadly firmer against the US dollar and Australian dollar, while Bitcoin edged higher against the pound. Investors also reacted to easing UK grocery inflation and signs consumers remain focused on affordable leisure spending.

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Market Numbers

FTSE 100: Down (-0.27%), 10,478.87
CAC40: Down (-1.03%), 8,173.110
DAX: Down (-0.80%), 25,184.89
NASDAQ: Up (0.30%), 30,057.6
S&P 500: Up (0.19%), 7,531.4

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In the Headlines

Profit Pressure – Pets at Home (LSE:PETS)
Pets at Home reported a slide in annual profits as price reductions and softer consumer demand weighed on margins. The update highlights continued pressure across UK retail as households remain cautious on discretionary spending.

Leadership Dispute – BP (LSE:BP.)
BP’s former chair said he was removed without explanation, raising questions around governance and leadership stability at the energy major. The development comes as investors continue to focus on strategic direction and energy market volatility.

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Currencies (vs GBP)

USD: Up (0.03%), $1.3451
CHF: Down (-0.12%), Fr.1.05522
EUR: Down (-0.14%), €1.1543
JPY: Up (0.01%), ¥214.244
AUD: Up (0.42%), $1.882660
Bitcoin (BTC/GBP): Up (0.09%), £56,405.4

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Commodities

Copper: Down (-0.45%), 6.42270
Gold: Down (-0.54%), 4,483.18
Brent Crude: Down (-2.78%), 94.29
Natural Gas: Down (-0.17%), 2.994

British equities edged lower on Wednesday as uncertainty surrounding U.S.-Iran ceasefire negotiations and ongoing tensions in the Strait of Hormuz outweighed signs of tentative diplomatic progress, reversing earlier gains across London markets.

The FTSE 100 fell 0.09%, underperforming its European peers, while Germany’s DAX rose 0.54% and France’s CAC 40 added 0.35%. Sterling was little changed, trading 0.01% higher at $1.3447 as of 07:22 GMT.

Oil prices retreated after Tuesday’s sharp rally, with Brent crude down 2.20% at $94.56 a barrel and WTI crude falling 2.7% to $91.37, as traders assessed conflicting developments surrounding the Strait of Hormuz and wider Middle East negotiations.

Market sentiment remained fragile after Iran accused the United States of breaching the maritime ceasefire through strikes on targets in southern Iran. Washington said the military response was defensive, citing Iranian drone activity near U.S. naval vessels and reports of speedboats preparing to deploy naval mines, according to the New York Times, citing two U.S. officials.

At the same time, reports that several LNG tankers had recently passed through the Strait of Hormuz improved expectations that the key shipping route could remain operational, easing immediate concerns over global energy supply disruptions and pressuring crude prices lower.

Diplomatic discussions mediated by Qatar also continued, with access to Iran’s frozen overseas assets remaining a central point of disagreement, according to IRGC-linked Tasnim News. The report stated that any potential memorandum of understanding could require the release of approximately $24 billion in blocked Iranian funds.

Separately, internet monitoring group NetBlocks said Iran’s international internet connectivity had been largely restored on Wednesday after 88 days of near-total isolation, a development interpreted by some investors as a tentative confidence-building signal during negotiations.

New Zealand Foreign Minister Winston Peters said he had spoken with Iranian Foreign Minister Abbas Araghchi regarding Tehran’s position in the talks, while reiterating that freedom of navigation through the Strait of Hormuz would be essential for any lasting regional agreement.

However, more hardline rhetoric from Tehran continued to complicate the outlook. A member of Iran’s parliamentary national security committee said the country should make “maximum use” of the Strait of Hormuz because “the world” depends on it, while also calling for changes to the legal framework governing the waterway. Iran’s economy minister separately stated that the country was increasing use of land borders and northern ports to reduce reliance on southern maritime trade routes affected by the U.S. naval presence.

UK Market Round-Up

Pets at Home (LSE:PETS) reported a 30.2% decline in annual underlying pre-tax profit, broadly in line with market expectations, as weaker retail performance and price reductions offset continued growth in its veterinary operations.

Meanwhile, UK energy regulator Ofgem announced that the domestic energy price cap will rise by 13% between July and September, increasing average monthly household bills by around £18 for customers using both gas and electricity. The move reflects higher wholesale energy prices linked to escalating tensions surrounding the Iran conflict.

Shares in major UK energy companies moved lower in early London trading on Tuesday, even as oil prices recovered following overnight U.S. military strikes in southern Iran that renewed uncertainty around the stability of the fragile ceasefire and prospects for a diplomatic resolution.

Shell plc (LSE:SHEL) declined 0.40%, while BP plc (LSE:BP.) fell 0.71% by 09:14 GMT.

Smaller producers also trade lower

Mid-sized and independent energy producers also weakened alongside the oil majors. Harbour Energy (LSE:HBR) dropped 1.97%, Serica Energy (LSE:SQZ) lost 1.83%, and Ithaca Energy (LSE:ITH) slipped 1.56%.

Oil rebounds after military action near Strait of Hormuz

Brent crude futures rose 3.4% to $96.59 per barrel after tumbling 6.78% on Monday to close at $93.42.

Meanwhile, U.S. West Texas Intermediate crude traded down 3.64% at $93.08.

The U.S. military said it carried out “self-defence strikes” overnight targeting Iranian missile launch sites and boats allegedly involved in laying mines close to the Strait of Hormuz.

CENTCOM spokesperson Timothy Hawkins told CNN that forces acted “to protect our troops from threats posed by Iranian forces,” while maintaining that the ceasefire agreement remained active. Iranian authorities did not immediately confirm that assessment.

Negotiation hopes mixed with continued diplomatic tensions

The strikes came only hours after Donald Trump said meaningful progress had been achieved in negotiations, posting on Truth Social that Iran’s stockpile of enriched uranium would either be transferred to the United States or destroyed at a mutually agreed location.

Iranian officials provided a more cautious assessment. Foreign Ministry spokesperson Esmaeil Baqaei acknowledged progress on “a large portion of discussion topics” but warned that “frequent changes in the positions of American officials complicate every negotiation,” adding that no immediate agreement could yet be declared.

A senior Iranian delegation led by parliament speaker Mohammad Bagher Ghalibaf and Foreign Minister Seyed Abbas Araghchi travelled to Qatar on Monday for another round of discussions, which a U.S. official reportedly described as encouraging.

Nuclear dispute and sanctions remain major obstacles

According to CNN, disagreements over nuclear language and sanctions relief continue to represent the main barriers to a final agreement.

Washington is reportedly insisting on what officials have described as a “no dust, no dollars” approach, requiring Iran to eliminate nearly 1,000 pounds of highly enriched uranium before any sanctions relief or financial concessions are granted.

The Strait of Hormuz, a vital route handling around one-fifth of global oil supplies, has remained largely shut since the conflict began.

U.S. Secretary of State Marco Rubio said the waterway would reopen “one way or the other,” although he cautioned that reaching a deal could “take a few days.”

Energy sector faces uncertainty over future oil price support

Major oil producers have benefited from elevated crude prices throughout the conflict, supporting earnings across the sector.

However, investors remain aware that any durable peace agreement leading to the reopening of the Strait of Hormuz could quickly remove one of the key drivers behind recent strength in oil markets.

FTSE 100 rises as oil prices climb on Middle East tensions while Kingfisher and Union Jack Oil remain in focus.

Market Overview

European equities moved higher in early trading, with the FTSE 100 up 0.94 per cent to 10,535.44, while the CAC40 gained 1.76 per cent and the DAX rose 2.01 per cent. In the US, sentiment remained softer overnight, with the Nasdaq down 0.37 per cent and the S&P 500 lower by 0.42 per cent. Markets continued to balance hopes for easing tensions around Iran against concerns over rising energy prices following renewed US strikes in the region.

Commodity markets reflected ongoing geopolitical uncertainty, with Brent crude climbing sharply while gold eased back and copper remained flat. Sterling weakened modestly against major currencies including the US dollar and euro, while Bitcoin traded lower against the pound. Investors also continued to monitor energy supply risks around the Strait of Hormuz alongside broader inflation implications from elevated oil prices.

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Market Numbers

FTSE 100: Up (0.94%), 10,535.44
CAC40: Up (1.76%), 8,258.260
DAX: Up (2.01%), 25,389.10
NASDAQ: Down (-0.37%), 29,707.5
S&P 500: Down (-0.42%), 7,516.7

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In the Headlines

Sales slowdown – Kingfisher (LSE:KGF)
B&Q owner Kingfisher said sales growth slowed after a late start to spring reduced demand for seasonal and outdoor products. The update highlights continued pressure on UK consumer spending and retail demand amid uncertain economic conditions.

Strategic pivot – Union Jack Oil (LSE:UJO)
Union Jack Oil reported a swing to a loss as the company shifts its strategy towards growth assets in the United States. Investors are watching the transition closely as energy firms seek expansion opportunities amid volatile commodity markets.

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Currencies (vs GBP)

USD: Down (-0.22%), $1.3470
CHF: Down (-0.02%), Fr.1.05694
EUR: Down (-0.21%), €1.1573
JPY: Down (-0.12%), ¥214.421
AUD: Down (-0.03%), $1.881270
Bitcoin (BTC/GBP): Down (-0.75%), £56,854.5

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Commodities

Copper: Down (1.26%), 6.4893
Gold: Down (-0.76%), 4,526.63
Brent Crude: Up (4.79%), 96.32
Natural Gas: Flat (0.00%), 3.0385

European stock markets traded close to flat on Tuesday while crude oil prices advanced, as investors assessed the impact of fresh U.S. military action against Iran that weakened expectations for a near-term peace agreement.

By 07:05 GMT, the STOXX Europe 600 was broadly unchanged. Germany’s DAX declined 0.3%, France’s CAC 40 slipped 0.4%, while the UK’s FTSE 100 rose 0.5%.

Fresh military escalation clouds hopes for peace deal

The U.S. military launched what it called “defensive” strikes in southern Iran, targeting and sinking two vessels belonging to the Islamic Revolutionary Guard Corps that were reportedly attempting to deploy mines in the Strait of Hormuz.

Iran responded by firing missiles at U.S. aircraft, according to reports. The Wall Street Journal later cited a U.S. official saying that further American strikes targeted missile launch systems near Bandar Abbas.

Recent optimism surrounding a potential agreement between Washington and Tehran to end their nearly three-month conflict has since faded. Weekend reports suggested both countries had agreed in principle to a deal, while Donald Trump stated that negotiations were progressing “nicely.” However, Trump also cautioned that fighting could resume and intensify if no agreement is ultimately reached.

Oil recovers as markets monitor Strait of Hormuz developments

Oil prices moved higher, recovering part of Monday’s losses that had followed reports of diplomatic progress aimed at reopening the Strait of Hormuz.

Brent crude futures, the global benchmark, were last trading 2.4% higher at $98.39 per barrel after briefly falling below the $100 level earlier in the week.

Despite the recent pullback, Brent remains significantly above pre-conflict levels of around $70 a barrel, maintaining concerns that elevated energy costs could continue to fuel inflationary pressures globally.

Energy stocks gain while Ferrari slips

European energy companies benefited from the rebound in oil prices, with shares in Eni (BIT:ENI), Repsol (TG:REP) and TotalEnergies (EU:TTE) moving higher.

Elsewhere, Milan-listed shares of Ferrari N.V. (BIT:RACE) fell more than 5% after the company revealed its first fully electric vehicle.

UK equities moved higher on Tuesday as optimism surrounding potential ceasefire negotiations between the United States and Iran helped improve investor sentiment, offsetting renewed strength in oil prices that pushed Brent crude back towards the $100-a-barrel mark.

The FTSE 100 advanced 0.75%, outperforming weaker European counterparts. Germany’s DAX fell 0.28%, while France’s CAC 40 declined 0.38%. Sterling weakened 0.21% against the dollar to $1.3473 as of 07:15 GMT.

Oil rebounds as tensions remain high around Strait of Hormuz

Brent crude rose more than 2% after partially retreating in the previous session, following confirmation from U.S. Central Command that American forces had carried out “self-defence strikes” targeting Iranian missile launch facilities and boats operating near the Strait of Hormuz.

Iran has effectively restricted almost all non-Iranian shipping traffic through the strategic waterway since the outbreak of hostilities, disrupting roughly one-fifth of global oil and liquefied natural gas flows.

A report from Nikkei indicated that Iran had agreed in principle to remove naval mines from the strait within 30 days under a developing memorandum of understanding tied to ceasefire discussions.

UK inflation pressures persist as retail prices climb

Data from the British Retail Consortium showed UK shop price inflation accelerated to 1.2% in May from 1.0% in April, driven by supply chain disruption linked to the conflict and higher energy costs.

Furniture as well as health and beauty products recorded some of the strongest price increases as businesses faced rising raw material and transport expenses. Food inflation, however, eased to a one-year low of 2.7%.

The BRC urged the UK government to take further action to reduce cost pressures facing retailers and consumers.

Diplomatic signals remain mixed

On the diplomatic front, Donald Trump stated on Truth Social that Iran’s enriched uranium would either be transferred to the United States “to be brought home and destroyed” or eliminated locally “in conjunction and coordination” with Tehran.

A U.S. official later confirmed that Iran had agreed in principle to those terms. However, Iranian Foreign Ministry spokesman Esmaeil Baqaei warned that “the frequent changes in the positions of American officials complicate every negotiation.”

Meanwhile, U.S. Secretary of State Marco Rubio said any agreement could still “take a couple days,” tempering expectations of an immediate breakthrough.

UK market round-up

Kingfisher plc (LSE:KGF) reported a 0.7% decline in first-quarter underlying sales amid subdued home improvement demand but maintained its full-year profit guidance, citing resilient performance across core categories despite weaker seasonal trading caused by a delayed start to spring.