- FTSE 100 up 31 points at 9,189
- BHP up thanks to divi
- Defence stock take a hit
- IWG shares tank 17%
4.52pm: Potential peace talks boost stocks
The FTSE 100 gained 31 points to close at 9,189 on Tuesday on hopes of Russia-Ukraine peace talks.
“European markets rose as US President Trump moved to arrange a Putin-Zelensky meeting ahead of a possible trilateral summit,” IG senior technical analyst Axel Rudolph said.
4.03 pm: Footsie on the front foot
After a slow start, the blue-chip index appears to have found a head of steam.
The impetus appears to be home-grown with the strong performances of JD Sports, Marks & Spencer, Diageo and BHP cancelling out the dour showing by the UK defence sector.
Across in the US, the picture was mixed with the Dow paddling in positive territory, but the broader-based S&P 500 and Nasdaq firmly in reverse gear.
1:15 pm: BHP shares rise thanks to divi
BHP Group Ltd (LSE:BHP, ASX:BHP) shares gained 1.96%, to 2,0225p, after its full-year results landed comfortably in line with expectations, plus shareholders welcomed a better-than-expected final dividend and signs of a more flexible approach to capital returns.
The mining group reported revenue of US$51.26bn, almost exactly matching the consensus estimate of US$51.29bn.
Underlying earnings before interest, tax, depreciation and amortisation (Ebitda) came in at US$25.98bn, just ahead of forecasts, while operating income of US$10.16bn was bang in line.
Performance by commodity was mixed. Iron ore, the group's cash cow, delivered Ebitda of US$14.4bn, close to the US$14.54bn expected.
Coal was softer at US$573m against a consensus of US$739m, while copper stood out, beating forecasts with US$12.33bn of Ebitda, helped in part by strong prices for by-products such as gold and silver. The ‘Other’ segment also surprised positively.
Panmure Liberum noted that these moving parts ultimately cancelled each other out, leading to an overall “in line” result. But the final dividend of 60 cents per share, taking the full-year total to US$1.10, was well ahead of the expected 51 cents.
12.20 pm: Defence stocks take a hit as peace talk headlines trigger sell-off
UK defence names were among the biggest fallers on Tuesday as investors reacted to headlines about potential peace talks between Ukraine and Russia. Babcock, BAE Systems, Rolls-Royce and Melrose – the owner of GKN – all slid between 2% and 6%, topping the FTSE 100 losers’ board.
At first glance, the move looked like straightforward profit-taking. Defence has been one of the market’s best-performing themes since Russia’s invasion of Ukraine in 2022, with investors piling in as governments across Europe pledged to boost military spending. After such a strong run, any excuse to lock in gains will do.
But there are a couple of other forces at play.
The immediate trigger was news that Donald Trump had spoken with both Volodymyr Zelensky and Vladimir Putin, and was working to arrange a face-to-face meeting between the Ukrainian and Russian leaders. European figures, including Sir Keir Starmer and Emmanuel Macron, hailed “real progress” from the White House talks, while Trump himself told supporters that everyone was “happy about the possibility of peace”.
For defence contractors, even the whiff of a ceasefire can dent sentiment. The logic is simple: if the conflict cools, the urgency for new equipment and ammunition orders fades. That means less pricing power for contractors and fewer “quick-turn” contracts, particularly in Europe, where governments have been scrambling to rebuild stockpiles.
There is also a structural angle. Some analysts have warned that any security guarantees underpinning a peace deal could tilt procurement further towards US suppliers, especially if Washington insists that European allies channel more orders across the Atlantic. That risk is harder to quantify but lurks in the background whenever transatlantic defence coordination is discussed.
Rolls-Royce and Melrose are somewhat shielded thanks to their big civil aerospace businesses, but both still move with the defence trade. BAE and Babcock, by contrast, are much more exposed to UK and European budgets, so their shares tend to be more sensitive to the ebb and flow of geopolitical headlines.
For now, nothing fundamental has changed. Defence spending commitments remain in place, and order books are still growing. Tuesday’s drop looked more like a bout of profit-taking amplified by peace talk headlines than a shift in the long-term story. But it was a reminder that this corner of the market is as much about politics as earnings.
9.25 am: Regus owner hit
Down among the mid-caps, shares in flexible workspace operator IWG fell 17% on Tuesday after the group warned that full-year earnings would come in at the lower end of its previously guided range.
The Regus office chain owner said adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for 2025 would likely be closer to $525 million than the top end of $565 million, citing higher investment in its Managed and Franchise division.
The warning overshadowed what was otherwise a solid first-half performance. System-wide revenue rose 2% year on year to a record $2.2 billion, while group adjusted EBITDA increased 6% to $262 million.
The company highlighted stronger recurring management fees and improved margins in its company-owned centres, supported by higher occupancy.
Chief executive Mark Dixon said IWG’s global pipeline remained strong, with almost one million rooms now open across 121 countries, and reiterated the group’s $1 billion medium-term EBITDA target.
The stock topped the FTSE 250 losers' list, dropping 36.8p to 190.8p.
8.15 am: Dull start
The FTSE 100 made another quiet start to proceedings as the summer trading lull continued in London.
Powder was kept dry ahead of the Fed's Jackson Hole meeting, and there was a certain degree of scepticism around the latest efforts to broker a Ukraine-Russia peace deal.
The big corporate news of the day came from BHP, which weighed in with record results, but a guarded assessment of prospects.
That said, the shares were up 1.4% in the first 15 minutes of trading, and BHP's statement appeared to provide a lift to the other major mining stocks.
7.13 am: Quiet, but positive start predicted
The FTSE 100 looks set to resist the pull lower from Wall Street and Asia's main markets to open around 11 points higher at 9,168.74.
In Washington, Ukrainian President Volodymyr Zelenskiy said security guarantees for his country could be agreed within 10 days following talks with President Donald Trump and European leaders.
The comments came after NATO’s Secretary General described the meetings as “very successful”, though Trump’s recent summit with Vladimir Putin in Alaska yielded no breakthrough on ending the conflict.
Looking ahead, the Federal Reserve holds its Jackson Hole symposium, where chair Jerome Powell is expected to outline the economic outlook.
Traders are pricing in a very high chance of a quarter-point rate cut next month, with sentiment hinging on a potentially dovish signal.