London equity benchmarks and the pound registered losses in early trading on Thursday as investors remained focused on developments in the Middle East and absorbed a range of corporate results.
By 08:23 GMT the FTSE 100 had eased 0.3%. The British pound was down 0.4% versus the dollar at 1.3323. Major European indices also fell, with Germany's DAX dropping 0.5% and France's CAC 40 declining 0.5%.
Market context and outlook
Market participants continued to price in a persistent period of geopolitical risk as analysts and strategists assessed the likely near-term trajectory of the conflict in the Middle East. Jefferies reiterated its initial assessment that the confrontation could last two to three weeks, a view the firm said is informed by calculations around missile activity and anticipated objectives of U.S. and Israeli forces.
Jefferies outlined two short-term military objectives it expects to shape operations: first, the removal of Iran's missile-launching capacity to protect U.S. air bases and regional allies; second, the degradation of Iran's naval capabilities to keep the Strait of Hormuz open for shipping. Those operational aims, the firm said, inform its expectation for continued market sensitivity to developments in the region.
The investment bank also cautioned on certain market repricings. In fixed income, Jefferies described recent front-end moves in Europe and the U.K. as unjustified and stated a preference for buying the front end in both regions. On monetary policy, the firm continues to view the European Central Bank as more likely to cut than raise rates this year, though it treats no change as the base case. Jefferies added that market pricing implying a rate hike by Q1 2027 is not justified in its view. For the U.K., Jefferies disagrees with the recent front-end selloff and retains a terminal rate estimate of 3%.
UK corporate roundup
Corporate earnings and trading updates across a range of sectors painted a mixed picture.
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Reckitt Benckiser Group PLC (RKT) reported stronger-than-expected fourth-quarter like-for-like sales growth. The consumer goods group said group like-for-like net revenue rose 5.4% in the quarter ended Dec. 31, ahead of a company-compiled consensus of 4.7%. The outperformance was largely driven by robust demand in emerging markets, where revenue grew 14.6% for the year; by contrast, revenue in Europe declined 1.4%. The company said emerging markets represent about 42% of Reckitt's core net revenues.
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WH Smith PLC (SMWH) said first-half trading was broadly in line with the performance it had previously reported for the first 15 weeks of the period. The retailer's shares slipped 1.4% in early London trade at 08:22 GMT. Total revenue for the first half increased 5% year on year, including like-for-like growth of 2%, slightly below the 3% like-for-like rise recorded during the first 15 weeks.
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Pagegroup PLC (PAGE) released full-year 2025 results that were in line with its guidance, though earnings per share missed analyst expectations due to a higher effective tax rate. The specialist recruitment firm reported gross profit of 769.5m for the year ended Dec. 31, 2025, down 7.6% in constant currency from 842.6m in 2024, and revenue fell 7.4% to 1,596.6m.
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Elementis PLC (ELM) beat analyst forecasts for full-year 2025, driven by margin expansion. The specialty chemicals company reported adjusted earnings per share of 13.7 cents for the year ended Dec. 31, 2025, ahead of the analyst consensus of 13.0 cents. Elementis also announced the sale of its pharmaceutical manufacturing business to Associated British Foods.
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Aviva PLC (AV) posted operating profit of 2,203m for 2025, up 25% year on year, meeting its 2bn target one year early. The insurer reported operating earnings per share of 56.0p, a 17% increase from 48.0p in 2024, in line with analyst estimates. Revenue from general insurance premiums rose 18% to 14,145m from 12,204m in the prior year.
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Taylor Wimpey PLC (TW) delivered full-year 2025 adjusted operating profit of 420.6m, meeting guidance of approximately 420m. The homebuilder recorded 10,614 completions excluding joint ventures, up 6.4% from the prior year. Revenue climbed 13.0% to 3,844.6m from 3,401.2m, supported by higher volumes and a 5.0% increase in the overall average selling price to 335,000. Adjusted operating profit margin, however, declined to 10.9% from 12.2% year on year.
Implications and investor focus
Investors are balancing near-term geopolitical risk and its potential market reverberations with company-specific results that range from beats to misses. The mixed corporate picture is likely to keep attention on sectors sensitive to global demand and margin dynamics - including consumer goods, insurance, and homebuilding - while rates and front-end fixed income moves remain a focal point for portfolios given Jefferies' views on recent repricing.
Market participants will be watching for fresh developments in the Middle East as well as subsequent corporate updates that could further influence sector-level performance and broader market sentiment.