Daily market update: markets recover, Berkeley, retail stocks

“Markets recovered some ground as the US appeared to temporarily pull back from the prospect of intervening directly in the Israel-Iran conflict,” says AJ Bell Investment Analyst Dan Coatsworth.

“Trading in Asia was mixed as China kept interest rates unchanged, while the US market was closed yesterday for the Juneteenth federal holiday. Early on Friday, futures prices implied modest weakness when Wall Street opens later on.

“Airlines, banks and other financials were among the stocks leading the way in London. Among the laggards, housebuilders were weak after Berkeley’s full-year results disappointed, and Shell and BP surrendered some of their recent gains as oil prices eased back from the highs seen earlier this week.

“While the immediate prospect of a US intervention in Iran may have diminished, the fact this is reportedly a two-week hiatus means it will remain a live issue for the markets going into next week. A meeting of European ministers with their Iranian counterparts to try and formulate a deal today could be crucial.”

Berkeley

“The departure of its chair and a warning that returns will be below targeted levels in the medium term put housebuilder Berkeley on the back foot.

“The company is guiding for a substantial drop in pre-tax profit for the current year and for profit to remain flat in the year afterwards, with the relatively downbeat outlook reflecting a volatile operating environment.

“Berkeley previously earned a reputation for shrewdly calling the housing market cycle, so the company’s conservative guidance in its latest results announcement has made investors sit up and take notice. That’s caused shares across the housebuilding sector to fall.

“But the company is not letting short-term disappointment distract it from long-term goals. It is planning major investment and a big expansion in the build-to-rent market.

“Michael Dobson is stepping down after three years as chair, with current chief executive Rob Perrins stepping up to become executive chair and finance chief Richard Stearn becoming CEO. Berkeley will hope this reshuffling of the pack won’t knock its long-term strategy off course.”

Retail sector

“The stock market is forward-looking and investors typically price in what they think will happen in the future rather than worrying about backward-looking data. On that basis, it’s important to note that investors have shrugged off shocking retail sales data for May and many stocks in the sector moved higher on the data. In fact, more than half of UK-listed retailers have generated decent returns for shareholders so far in 2025.

“Admittedly, weak retail sales figures for May set the scene for a difficult second half of 2025 for the nation of shopkeepers. A weak jobs market, uncertainty around tariffs and a patchy economic outlook are ingredients that leave a bad taste in the mouth.

“However, the unusually long period of hot weather we’ve enjoyed in June might translate into greater retail sales. Blue skies should have enticed consumers out of the house and onto the high street, but it could also mean they’ve spent less time indoors when they might have been browsing and purchasing goods online.

“The big unknown is whether May’s negative reading was a blip or a sign of things to come. GfK’s latest consumer confidence index improved in June, albeit still remaining in negative territory. That provides a glimmer of hope that the next set of retail figures won’t be as bad as the last.”