The market, having been burned before, is not getting too carried away on speculation about a US-Iran peace deal but the reports did lead to a higher open on Friday.
Brent crude oil prices remain choppy amid claims and counterclaims between Washington and Tehran. Any deal will not restore a pre-war situation overnight, as fully reopening the Strait of Hormuz and getting regional energy infrastructure back on stream will take months.
Government bond yields remain elevated to reflect ongoing fears about the inflationary pressures unleashed by the situation in the Middle East, with gilts affected by weak UK retail sales and higher than expected government borrowing.
Miners, retailers, travel stocks and housebuilders were among those to make gains in London, while energy stocks and defensive sectors were on the back foot. This follows a pattern which has become familiar since the conflict started and hopes for a resolution have waxed and waned. Separately, data and software groups bounced back from the latest bout of AI disruption jitters.
Workspace
Just when you thought Saba was turning the screws as far as it could, it manages to go even further.
The activist investor has upgraded its demands on serviced office provider Workspace, saying it now wants the entire roster of non-executive directors removed from the board and replaced with six of its choice. Previously, Saba wanted five directors removed and four new ones appointed.
With a 21.2% stake in the business, Saba is using its position as a large shareholder to get its voice heard. The activist is relentless and is delivering more drama than London’s West End.
Estée Lauder / Puig
Dan Coatsworth, Head of Markets at AJ Bell, comments:
Handbags at dawn appear to have kiboshed a near-$40 billion fashion and beauty merger deal. Estée Lauder and Puig’s union has collapsed following speculation around a power struggle. Estée Lauder’s shareholders were ecstatic, with the company’s share price jumping more than 10% in pre-market trading. That’s investors’ way of saying they’ve had a lucky escape.
Estée Lauder and Puig weren’t the most obvious companies to park together. One is focused on skincare, makeup and haircare while the other specialises in designer clothing. They meet in the middle on fragrances and perfumes. Putting everything under one roof felt a bit like a jumble sale rather than a match made in heaven.
A decision has been made to go it alone, meaning Estée Lauder needs a plan B to drive its recovery efforts.
Russ Mould: Investment Director
Russ Mould is AJ Bell's Investment Director. He has a Master's degree in Modern History from the University of Oxford and more than 30 years' experience of the capital markets.
He started out at Scottish...
