11th Aug 2026 08:39
(Alliance News) - Stock prices in Europe barely budged after the opening bell on Tuesday, as Middle East concerns continue to hit sentiment and stoke inflation worries, with investors also keeping one eye on upcoming US data.
Swissquote analyst Ipek Ozkardeskaya commented: "Risk appetite is weakening globally along with rising oil prices, which fuel global inflation expectations and push yields higher.
"Today, the cautious mood will likely remain in play, as investors stay on the sidelines before tomorrow’s closely monitored US CPI update."
The FTSE 100 index opened down just 1.36 points at 10,861.14. The FTSE 250 eased 14.76 points, 0.1%, at 24,729.78. The AIM all-share was up 0.54 of a point, 0.1%, at 796.92.
The Cboe UK 100 was down 0.1% at 1,079.96, the Cboe UK 250 was down 0.1% at 21,520.29, and the Cboe small companies rose 0.3% at 19,025.43.
In European equities on Tuesday, the CAC 40 in Paris was slightly higher, while the DAX 40 in Frankfurt was up 0.1%.
The pound ebbed to USD1.3503 on Tuesday, from USD1.3522 late Monday. Against the euro, it fell to EUR1.1700 from EUR1.1708. The euro faded to USD1.1537 from USD1.1549.
Against the yen, the buck rose to JPY159.30 from JPY158.92. Late Monday, it climbed to JPY159.35, the loftiest level since a currency intervention which sent the dollar as low as JPY155.22 earlier in August. A four-decade high of JPY163.98 was achieved in late-July.
Sydney's S&P/ASX 200 rose 0.2% on Tuesday.
The Reserve Bank of Australia on Tuesday decided to leave its cash rate target unchanged following its August meeting.
The nine-member monetary policy board voted unanimously to maintain its policy rate at 4.35% in August, matching the consensus forecast cited by FXStreet.
In China, the Shanghai Composite was down 0.8%, while the Hang Seng Index in Hong Kong shed 1.0%. Financial markets in Tokyo are closed on Tuesday for Mountain Day.
In the US on Monday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.1%, the S&P 500 down 0.1% and the Nasdaq Composite down 0.3%.
The yield on the 10-year US Treasury widened to 4.73% early Tuesday from 4.70% on Monday. The 30-year yield stretched to 5.27% from 5.24%.
A barrel of Brent surged to USD89.25 on Tuesday morning, from USD86.35 at the time of the London equities close on Monday.
US President Donald Trump said Monday he would seek conflict compensation from Iran as part of any peace negotiations, citing attacks and killings stretching back decades allegedly backed or perpetrated by Tehran.
Negotiations on ending the war and reopening the Strait of Hormuz have stalled, and his new demands risk putting a quick agreement further out of reach.
Trump's announcement was a direct response to Iran's insistence that US payment of war reparations are a pre-condition to any resolution of the ongoing hostilities.
Deutsche Bank analysts commented: "The more pessimistic narrative meant that Brent crude oil moved up for a 4th consecutive session yesterday. In addition, fears of a more protracted standoff were also gaining momentum.
"So that helped to revive inflation fears on both sides of the Atlantic. And that in turn led to mounting speculation about central bank rate hikes, with investors pricing in a more hawkish path for the months ahead. At the Fed, pricing for a September hike moved back up to a 52% chance, up from 44% last Friday. And at the ECB, a September hike was back up to a 90% chance, up from 85% last Friday."
Wednesday's US consumer price index reading will be key for Federal Reserve interest rate expectations. According to consensus cited by FXStreet, a slowdown in the annual rate of inflation to 3.4% in July from 3.5% in June is expected.
Gold climbed to USD4,360.52 an ounce early on Tuesday, from USD4,350.91 late Monday afternoon.
In London, Spirax, Legal & General and IHG were among the worst FTSE 100 performers.
Spirax shed 6.0%. The thermal energy and fluid technology company reported an increase in first half earnings and said it is on track to meet medium-term targets, before progressing even further in the longer-term.
Pretax profit in the first half of 2026 climbed 54% on-year to GBP135.4 million from GBP87.9 million, with revenue up 5.1% to GBP863.8 million from GBP822.2 million.
"We have again delivered resilient mid-single-digit organic growth in revenue and profit, well ahead of [industrial production]. Driving growth ahead of our markets, in spite of external conditions, is now becoming embedded in how we operate and demonstrates the strengths of our business model and strategic positioning in diversified and attractive end markets," Chief Executive Officer Nimesh Patel said.
"Continuing momentum in end markets such as Semicon and Biopharm as well as strong orderbooks, underpin our expectations for second half revenue and profit growth and we are reiterating our full year guidance."
Spirax expects mid-single-digit organic growth in revenue for the year as a whole.
Patel added: "We remain on track to deliver the medium-term targets we set out for the group in October 2024; and above these targets in the longer term."
Spirax lifted its interim dividend by 3.1% to 50.4 pence per share from 48.9p.
Analysts at Shore Capital Markets commented: "We note the strong recent share price run with investor interest increasing as end markets show positive signals and clearer signs emerge that the downgrade cycle is over."
By division, Watson-Marlow Fluid Technology Solutions delivered half-year organic growth of 7%, while Electric Thermal Solutions achieved an 11% improvement. Steam Thermal Solutions, meanwhile, its largest revenue generator, saw only 1% growth.
Spirax added: "STS organic sales growth was 1%, driven by demand growth of more than double IP, with some shipments specified by customers for delivery in the second half. As expected, the decline in large project sales in China continued to moderate, while MRO and solution sales again grew strongly. China sales were down 1% organically compared to the 6% decline in the first half of 2025."
IHG fell 2.2%. The Holiday Inn and Crowne Plaza operator said pretax profit shrunk 8.7% on-year to USD578 million in the first half of 2026, from USD633 million a year earlier, though revenue increased 5.6% to USD2.67 billion from USD2.52 billion. In the prior year, it made a USD79 million foreign exchange gain, though this time round it reports a USD7 million hit.
Adjusted earnings rose 8.7% to USD412 million from USD379 million.
Revenue per available room, a key metric in the hotel sector, climbed 4.1% on-year in the first half, after growth of 4.4% in the first quarter and 3.5% in the second.
While growth at group level eased in the second quarter, it picked up in the Americas alone, to 5.4% in the second quarter from 3.6% in the first quarter, supported by the World Cup, a "stronger US economy, as well as comparatives that became easier in Q2". RevPAR in the Americas was 4.8% higher year-on-year in the first half overall.
In the Europe, the Middle East, Africa, and Australasia segment, RevPAR grew 3.0% in the first half, but growth slowed markedly to 0.6% in the second quarter from 5.6% in the first three months of the year, owing to the US-Iran conflict. The Middle East region, which accounts for 19% of EMEAA's system and 5% of the firm globally, saw a 2% RevPAR fall in the first quarter and 19% in the second.
IHG added: "The rest of the EMEAA region experienced RevPAR growth of 7% in Q1 and 4% growth in Q2. The growth in Q2 included 3.1% in the UK, 2.3% in Continental Europe and 6.0% in East Asia & Pacific."
Finally, RevPAR rose 3.1% in the first half in Greater China, though like EMEAA, there was a second quarter slowdown. It rose 5.7% in the first quarter and then 0.8% in the second.
Legal & General shed 2.1% after a pair of recommendation cuts. Both Goldman Sachs and UBS cut the stock to 'sell' from 'neutral'. This followed Citigroup doing the same on Monday.
Elsewhere in London, Shoe Zone was on the front foot. The retailer jumped 23%. It continued to trade "positively" through July. As a result, cash and equivalents as at July 25 stood at roughly GBP7.0 million "ahead of original budget".
Shoe Zone still expects an adjusted pretax loss of no greater than GBP1.0 million for the financial year ending October 3.
It plans a buyback of up to around GBP3.5 million, it added.
By Eric Cunha, Alliance News news editor
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