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Home Energy Market Report: Investors switch back to risk-off mode after a brief bout of optimism

Market Report: Investors switch back to risk-off mode after a brief bout of optimism

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Matt Britzman
  • Global markets on the back foot as tensions continue.
  • Gold rises as investors take risk off the table.
  • Oil jumps on supply concerns.
  • Ashtead does just about enough.

Matt Britzman, senior equity analyst, Hargreaves Lansdown:

“Markets briefly breathed a breath of optimism yesterday afternoon – but it didn’t last. As tensions between Israel and Iran flared again overnight, that momentary calm quickly gave way to renewed uncertainty. Oil and gold prices, which had dipped on hopes of de-escalation, are climbing once more. President Trump’s urgent call for an immediate evacuation of Tehran jolted investors back into risk-off mode. The FTSE 100 opened down 0.5% in early trading, reacting to the wider market jitters as investors hang on to every development in the Middle East.

Gold’s safe-haven appeal is back on the menu, while oil prices are rising on fresh supply concerns. There are a lot of eyes on the oil markets – not just for geopolitical reasons but for their broader economic impact. Energy prices remain a crucial piece of the inflation puzzle, and falling oil had been a cornerstone of the US President’s pressure campaign to nudge the Fed toward rate cuts. With oil climbing again, that strategy faces new headwinds.

Equipment rental giant Ashtead delivered a solid set of results this morning – nothing flashy, but better than feared. Expectations were already low after a string of disappointing quarters, and growing uncertainty in the US construction market had taken a toll on investor sentiment. Still, there are signs the tide may be turning. After a stretch of heavy investment, Ashtead has pulled back, focusing on efficiency and capital discipline. That shift is starting to pay off: even modest top-line growth is translating into healthier profits and stronger cash flow. Despite a lull in the market, better use of the existing fleet offers some potential upside to the depressed valuation, and Ashtead’s plans to move its primary listing to the US remain on track for next year.”

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