The FTSE 100 was trading largely flat on Wednesday after giving up early gains driven by a rally in defence stocks amid rising political tensions.

London’s leading index was bouncing around the 9,245 level at the time of writing after US stocks recorded another fresh high overnight.

“European shares pushed ahead on a busy day for corporate news,” says Russ Mould, investment director at AJ Bell.

“A record-breaking day for Wall Street yesterday helped to calm investor nerves over Poland shooting down Russian drones that violated its airspace. Geopolitical concerns have been front and centre for multiple years, and investors had been hoping for tensions to ease.

“Oracle shares soared amid optimism about AI-related revenue, sending a strong message to the broader market that the tech revolution is still red hot. That had a positive read-across to Nvidia which advanced 2% in pre-market trading.”

The overarching hope of an interest rate cut by the Federal Reserve next week continued to propel US stocks higher as markets price in a reduction in borrowing costs.

However, investors will receive a raft of US inflation data during the remainder of this week, starting with PPI data on Wednesday and then CPI tomorrow. A much stronger-than-expected reading on either of these could pour cold water on rate cut hopes, although the readings will have to be significantly higher to unnerve equity bulls.

“Sentiment could turn sour if today’s inflation snapshot comes in higher than expected,” explained Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“The headline rate is expected to come in at 2.9% but the real number to watch will be core CPI, which strips out volatile food and fuel prices. Its broadly expected to be stable, coming in at 3.1% on an annual basis, but if it ticks higher month to month, it could put the cat among the pigeons.”

In the UK, DCC soared to the top of the FTSE 100 leaderboard after announcing it would return £800m in proceeds from the sale of its healthcare business. DDC shares were 4% higher at the time of writing.

BAE Systems joined the rally after Poland shot down a Russian drone that entered its airspace, raising geopolitical concerns.

AB Foods was firmly at the bottom of the FTSE 100 leaderboard as investors turned their noses up at slow Primark growth.

“Primark has long been the jewel in ABF’s crown, a retailer that’s thrived on value, volume, and an uncanny knack for reading the consumer mood,” explained Mark Crouch, market analyst for eToro.

“But today’s update raises more questions than it answers. Sales growth is slowing in Europe, flat in the UK, and while the US is picking up pace, it’s still not enough to counterbalance weakness elsewhere. For a business often seen as retail’s early warning signal, the signs don’t look good.”

AB Foods shares were down 10% at the time of writing.

Vistry Group had a tough start to 2025 as completions and profits sank amid a slow housing market that is yet to feel the impact of Labour’s efforts to boost activity.

Housebuilder Vistry Group delivered adjusted operating profit of £124.4 million for the six months to 30 June, down from £161.8 million in the same period last year but in line with expectations.

The company completed 6,889 homes, 12% fewer than the 7,792 units delivered in the first half of 2024, reflecting reduced partner demand.

Despite lower volumes, the average selling price rose 4% to £283,000, helping to offset the decline partially. Group revenues fell 6% to £1.85 billion.

These are pretty dismal figures and paint a picture of a company feeling the pressure of the slow implementation of government homebuilding policy.

“Vistry’s first-half results didn’t bring any nasty surprises as the housebuilder looks to rebuild investors’ confidence. In line with previous announcements, the group saw revenue decline and profits fall at double-digit rates as partner-funded activity came off the boil,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

“Much more important than first-half numbers though was the outlook for the second half, and it didn’t disappoint. The UK government’s pledge to invest an unprecedented £39 billion in affordable housing over the next decade marks a significant step up in funding, and it’s already having the desired effect.

“The money has started to flow, and partner-funded activity is picking up again, which should drive growth in the order book in the near future. As these houses are built, that will convert into revenue and should help the top line return to growth territory.”

The firm is well-positioned to benefit from the government’s £39 billion Social and Affordable Homes Programme, announced in June. One would think that the expected future demand created by this scheme is playing a significant part in shares trading down only 5% on Wednesday.

Vistry has built a strong pipeline of transactions expected to be completed in the second half, with positive momentum heading into 2026.

The company remains 88% forward sold for the full year and guidance is unchanged, with management expecting year-on-year profit growth for 2025.

The weakness could be a buying opportunity for those confident in the long-term picture.

Associated British Foods has delivered a mixed trading performance in the second half of its financial year, with strong growth in the US offsetting weaker European markets.

Primark numbers used to be highly anticipated and could seriously move the dial for AB Foods shares. However, in recent years, growth has started to splutter, and it’s very difficult to get excited about ABF’s updates.

The first half of 2025 proved to be more of the same slow, uninspiring growth. Investors have started to throw in the towel.

AB Foods shares were down 11% in early trade on Wednesday as investors digested Primark’s numbers, as well as grocery, sugar and agriculture performance that underwhelmed.

Primark shows resilience

The retail giant’s sales are expected to grow around 1% in H2, despite challenging market conditions. UK and Ireland performance improved sequentially from H1, with sales up 1% and market share rising from 6.6% to 6.8%. The retailer benefited from strong womenswear offerings and increased digital engagement, including Click and Collect, now available across all 187 British stores.

European performance proved more subdued. Spain and Portugal are expected to grow around 2%, while France and Italy faced headwinds with sales declining approximately 4%. Central and Eastern Europe provided a bright spot with 9% growth driven by new store openings.

The US delivered standout performance with 23% sales growth expected in H2. Four new stores opened, including the company’s first Tennessee location, as the value proposition resonated strongly with American consumers.

The company relies on new stores for growth and continues to expand its store portfolio with 15 new openings in H2, including preparations for Middle East franchise operations, which are set to start in Kuwait this October.

Food businesses face headwinds

Grocery sales are expected to match prior year levels, with international brands like Twinings and Ovaltine performing well. However, Allied Bakeries recorded an operating loss in challenging UK market conditions. ABF announced an agreement to acquire Hovis Group, subject to regulatory approval, targeting significant cost synergies.

Ingredients delivered solid results with sales broadly matching last year. AB Mauri showed good underlying growth, while speciality ingredients businesses performed well, particularly in enzymes and health nutrition.

Sugar struggles continue

Sugar faces ongoing challenges with an adjusted operating loss of around £40m expected for the full year. The UK government’s decision not to support Vivergo bioethanol led to plant closure, while low European sugar prices and high beet costs pressured UK and Spanish operations. African operations showed mixed performance, with Malawi and Eswatini growing while other markets recovered from drought impacts.

Agriculture sales are expected to rise 1% in H2, though operating profit will be significantly below last year due to exceptional weather affecting joint venture Frontier and one-off costs.

“I’m pleased with how the Group has performed in the second half of our financial year in what continues to be a challenging environment, characterised by consumer caution, geopolitical uncertainty and inflation,” said George Weston, Chief Executive of Associated British Foods.

“Primark delivered improved trading in the UK and strong sales growth in the US, while trading on the continent was softer in a weaker consumer environment. In our food businesses, overall trading in the second half was in line with our expectations.

“This has also been a busy period strategically, including the decision to close the Vivergo bioethanol plant, the restructuring of our Spanish sugar business, and an agreement for Allied Bakeries to acquire Hovis to create a financially sustainable UK bakeries business. Against a backdrop of continued volatility in 2026, we will start to see the benefit from our recent actions and continued investment.”

The FTSE 100 traded higher on Tuesday as global merger and acquisition activity provided investors with another reason to be positive, with the market looking forward to a US interest rate cut next week.

Anglo American led the FTSE 100 0.3% higher as the mining group announced a merger with Teck Resources to create a copper-focused mining giant.

The tie-up followed a string of US deals that underscored the wider optimism in markets created by hopes of lower interest rates.

“A spate of deal-making fired up equities, with many of the main market indices advancing in Europe and Asia. Futures prices also imply a decent start to Wall Street when US markets open later,” says Russ Mould, investment director at AJ Bell.

“Anglo American unveiled a deal to gobble up rival copper miner Teck. On a smaller scale, Novartis said it would buy US clinical biotech firm Tourmaline Bio for $1.4 billion. Yesterday, US lender PNC Financial moved on FirstBank in a $4.1 billion deal, and quantum computing firm Infleqtion announced plans to float in the US via a SPAC, valuing it at $1.8 billion.”

Anglo American shares soared 9% on news of a merger with Teck Resources that would create the world’s 5th largest copper miner.

“It’s interesting to see two companies who have been bid targets find refuge in each others’ arms, snubbing their suitors and going their own way,” said Chris Beauchamp, Chief Market Analyst at IG.

“It looks like the two boards decided they could preserve their own identity by merging rather than letting themselves be absorbed by bigger rivals. As miners grapple with rising costs and uncertain demand, it’s perhaps not surprising that these two have sought to bolster economies of scale. It will also set off a further wave of M&A activity, as the rebuffed suitors look elsewhere for their own expansion.” 

In a boost to London’s market, ‘Anglo Teck’ will keep its London Stock Exchange listing alongside listings in South Africa and the US. Should Anglo American have been taken over as opposed to striking today’s merger deal, it would be yet another loss of a major multinational from London’s flagship index.

The mining sector rallied on the news of the Anglo Teck deal, with Glencore jumping 4% and Antofagasta rising 2% as investors questioned whether the deal would spark a wave of M&A.

Phoenix Group recovered some of the losses sustained yesterday after it announced a rebrand to Standard Life amid mixed results.

Profit taking hit the defence sector with BAE Systems, Babcock and Rolls-Royce among the FTSE 100’s top fallers.

Eco Buildings Group shares rose on Tuesday after the firm announced a major milestone with the first delivery of prefabricated wall components to its 18-unit apartment block project in central Tirana.

The delivery marks the start of on-site assembly for the €2.2 million contract announced earlier this month.

Investors cheered the news, and shares rose over 12% on Tuesday.

The company said its Albanian factory is now operating at full capacity. Additionally, 40% of the materials required for the apartment block are in stock, demonstrating Eco’s ability to scale construction and meet growing demand rapidly.

Cash flows are now secured as the company enters active production and validates the expansion strategy.

Interestingly for investors, Eco noted that the successful deployment of its proprietary prefabricated building system in Tirana is generating considerable interest from potential customers and management expects to secure additional contracts throughout 2025.

“Our factory is performing very well and reliably producing our Eco walls at pace,” said Etrur Albani, Executive Vice Chairman of Eco Buildings.

“Our inventory is sufficient to provide 40% of the total material required for this first apartment block. We have letters of intent for a further two apartment blocks of identical size and anticipate constructing all six planned for this site in the centre of Tirana. We look forward to announcing further contracts of this nature and hopefully others in the near term.”

Alaska-focused oil and gas explorer Pantheon Resources (LON: PANR) has successfully drilled the lateral section of the Dudhe-1 appraisal well to 5,200 feet, which is deeper than planned. It is preparing for flow testing. The management 2C resource estimate has been raised by 228mmbbl. Zeus has a total risked NAV of 77p/share. The share price increased 13.1% to 32.675p.

Invinity Energy Systems (LON: IES) has signed a memorandum of understanding with Xiamen C&D in China. The deal seeks to establish manufacturing of the company’s vanadium flow battery products in China. The share price improved 7.69% to 21p.

Journeo (LON: JNEO) says its recently acquired cyber security business secured a £5m framework agreement with a UK utility for infrastructure protection services. The share price rose 7.52% to 493.5p.

Building materials supplier SigmaRoc (LON: SRC) has managed to hold up volumes despite the weak European construction markets and the benefits of cost savings are coming through. Pro forma revenues were 1% down in the first half. Earnings increased 52% to 4.66p/share and net debt was reduced to £451m. The share price is 6.98% ahead at 124.1p.

Telecoms administration platform provider Cerillion (LON: CER) has won two contracts worth £17.3m over five years. An £8m services contract was won with the same European customer in May. These contracts could generate revenues of £5m this year, assuming an upfront software licence, and underpin the current forecasts. The share price is 6.03% higher at 1495p.

FALLERS

Digital health platform developer Trellus Health (LON: TRLS) had net cash of $1.6m at the end of June 2025, down from $4.3m at the end of 2024. The cash will last until November. The monthly cash burn has been reduced to $440,000. Revenues have reached $379,000. A fundraising is possible in the next few weeks. The share price slumped 40.6% to 0.475p.

Mercantile Ports & Logistics (LON: MPL) has been trying to refinance its loan facility with three banks. One of those banks has not yet agreed to a one-time settlement at a discount to the outstanding figure. The share price dipped 22.5% to 0.95p.

URU Metals (LON: URU) says the latest data on the Zeb nickel project in South Africa has delineated multiple discrete conductors and the 3D integration strengthens the case. There will be a follow-up programme prior to selecting locations for drill-testing. The share price slipped 14.7% to 3.2p.

UK regulatory changes hit UK revenues at Gaming Realms (LON: GMR), but the mobile games developer continues to grow strongly in North America. Interim revenues were 18% ahead at £16m, helped by an increase in brand licensing from £300,000 to £2.4m – that is more lumpy in terms of revenues. The UK games will be adapted for the new regulations by the end of the year, and revenues should recover. North American revenues continue to grow. and the company is launching in new markets. Full year pre-tax profit is forecast to grow from £8.3m to £11.2m. The share price fell 10.8% to 44.95p.