Key events

12m ago European equities decline
19m ago Vistry forecasts first-half loss amid unsold properties and price cuts
1h ago Severn Trent showed serious shortcomings in wastewater obligations yet avoids penalty
2h ago Virgin Media penalized 28 million pounds for blocking customer cancellations
2h ago Introduction: Crude oil costs climb following new American attacks on Iran and reinstated penalties on Tehran

European equities decline

European equity markets are falling in line with Asia. Wall Street posted limited declines on Tuesday as well.

The FTSE 100 in London dropped 130 points or 1.2 percent to 10,533. The Dax in Frankfurt and the FTSE MIB in Milan each declined 1.1 percent while the CAC in Paris eased 0.9 percent and the Ibex fell nearly 1 percent.

Richard Hunter, head of markets at the trading platform interactive investor, said:

The ripples of uncertainty from Asia reached US shores where Samsung Electronics shares dropped 7 percent despite strong results. This raises questions about AI valuations and elevated expectations while the upcoming US second-quarter earnings season faces intense scrutiny with potential disappointment except for the most robust reports.
Concerns are growing that capital spending may fail to deliver productivity gains and returns to justify investment. US markets made little progress as investors favored healthcare and financials amid ongoing rotation and names such as Walmart that announced price reductions to protect domestic position.
Sentiment was further pressured by what amounts to a ceasefire in the Middle East in name only. Reports of an Iranian strike on a liquefied natural gas tanker in the Strait of Hormuz prompted US retaliatory action in the area driving oil prices higher by more than 3 percent. The US also reinstated crude oil export sanctions on Iran raising doubts about longer-term stability in the region.
Although the Federal Reserve minutes later today will not reflect this latest event the central bank focus on inflation will require reassessment potentially returning the prospect of a rate increase this year.

Vistry forecasts first-half loss amid unsold properties and price cuts

Vistry Group one of Britain largest housebuilders has warned of a first-half loss driven by excess unsold homes that forced discounting.

Adam Daniels the new chief executive in post for three months has implemented price reductions to clear inventory. Vistry formerly Bovis Homes held 600 million pounds of unsold private homes at the start of the year but has cut this roughly in half leaving under 300 million pounds.

It stated that 190 million pounds of the reduction will occur upon completion of sales in the second half.

The average discount on private sales reached 7.1 percent up from 1.4 percent in the first half of last year.

Vistry expects a pre-tax loss of 30 million pounds in the first half worse than its May forecast of a sharply reduced profit versus the prior year.

Its chief financial officer Tim Lawlor has resigned after four years and will depart in October for a CFO position at a large privately held firm in another sector.

After a strong start market conditions weakened in the second quarter due to greater uncertainty and reduced buyer confidence linked to the Middle East conflict Vistry noted.

Although we would welcome demand-side stimulus we do not expect a major shift in open-market conditions in the second half or early 2027.

Build cost inflation is leveling at around 3 to 4 percent after rising earlier with material costs lifted by effects from the Middle East conflict.

New boss Daniels is reviewing operations and will reveal findings in September. The firm aims to reduce annual costs by 25 million pounds via voluntary redundancies and selective hiring.

In recent years Vistry has moved toward social housing in partnership with housing associations local authorities and build-to-rent investors and is finalizing new framework deals with 10 key partners.

Vistry rebranded from Bovis after acquiring the housebuilding arm of Galliford Try in a 1.1 billion pound transaction in 2020 and purchased the partnerships business Countryside for 1.3 billion pounds two years later.

Segro the FTSE 100 warehouse owner is creating a joint venture to develop a data center in Paris.

The company is discussing a proposed 12.6 billion pound takeover with US logistics firm Prologis and plans to build a fully fitted data center in a 50-50 venture with UK-based Pure Data Centres Group.

Segro is also negotiating a first fully fitted data center lease in Park Royal London. It claims Europe largest data center cluster.

Segro properties were 94.5 percent occupied in the first half down 0.4 percent from December.

The company founded in 1920 owns manages and develops modern warehousing industrial space and data centers across the UK and seven other European nations with a portfolio of 10.9 million square meters ranging from large logistics to urban warehouses and data centers.

In the US construction of numerous data centers for AI has raised major resident concerns about pollution noise effects on drinking water high energy use and loss of natural habitats.

Severn Trent showed serious shortcomings in wastewater obligations yet avoids penalty

The water firm Severn Trent was found to have serious shortcomings in handling wastewater and sewage yet escaped a fine.

Britain water regulator Ofwat chose not to impose a financial penalty because the company took early steps to spot issues and invested 98 million pounds to resolve them.

This covers added capacity at 65 wastewater treatment sites storm tank upgrades increased storage at storm overflows and 26 million pounds of nature-based solutions in the Mansfield area.

This marks the eighth case in Ofwat sector-wide wastewater probe which has produced enforcement actions and fines exceeding 300 million pounds so far.

Ofwat probe found Severn Trent Water breached duties by failing to provide effective drainage and manage sewer contents. The firm also breached licence rules requiring adequate processes and systems.

Although it now has proper processes the company must resolve remaining issues the regulator stated.

Unlike the seven prior cases Severn Trent Water identified problems itself and began fixes before Ofwat launched enforcement in July 2024.

Two further wastewater cases remain open.

Lynn Parker senior director for enforcement at Ofwat said:

Our investigation identified serious unacceptable breaches by Severn Trent Water that is not in question and the company accepts it. Yet their response sets the standard we expect from all firms: spotting the issue proactively investing to correct it and cooperating openly with the regulator.
The 41 percent reduction in spills we now see represents genuine accountability. We will always act when companies fail customers and the environment. But we will also state publicly when a company acts correctly.

Virgin Media penalized 28 million pounds for blocking customer cancellations

Lauren Almeida

Virgin Media has been fined 28 million pounds by the UK telecoms regulator for repeatedly blocking customers from ending contracts over nearly three years.

Ofcom found that Virgin Media likely mishandled millions of calls from January 2022 to September 2024 using deliberate call-dropping unnecessary transfers and placing customers on hold without reason.

The watchdog began its probe after receiving nearly 2,000 complaints from Virgin Media broadband landline and pay-TV customers who faced difficulties cancelling.

The 28 million pound fine reduced by 30 percent after Virgin Media admitted failings and agreed to settle represents Ofcom largest ever under consumer protection rules.

The regulator probe showed millions of calls were likely mishandled by agents to delay or stop customers from cancelling and switching. Customers can save hundreds of pounds by changing providers.

It also found evidence of deliberate mishandling by retention agents with a commission structure that encouraged and rewarded such behavior.

Introduction: Crude oil costs climb following new American attacks on Iran and reinstated penalties on Tehran

Good morning and welcome to our rolling coverage of business financial markets and the global economy.

Oil prices have increased more than 3 percent after fresh US and Iranian strikes tested a fragile truce.

Brent crude rose 2.49 dollars to 76.65 dollars a barrel up 3.4 percent.

The US military launched another round of strikes against Iran on Tuesday and revoked a licence permitting Tehran to sell oil after three tankers were struck by projectiles in the Strait of Hormuz adding pressure on the ceasefire agreed weeks ago to reach a permanent peace deal.

NATO secretary general Mark Rutte described the US strikes as absolutely necessary speaking to reporters ahead of a NATO leaders summit in Ankara.

At least four oil and gas tankers have reversed course after attempting to transit the strait a vital shipping route according to ship-tracking data.

However at least two crude oil tankers succeeded in exiting the strait each carrying 2 million barrels.

Asian stock markets declined in volatile trading with Samsung Electronics shares falling for a second day despite better-than-expected profits. Samsung dropped 6.8 percent.

The Nikkei in Tokyo fell 1.6 percent while the Kospi in Seoul tumbled nearly 5 percent. Hong Kong Hang Seng rose 3 percent against the trend.

Sara Perring head of APAC cash equity sales at JPMorgan told Reuters

Short-term profit taking on long-term winners especially the AI theme appears to be a global pattern. We should expect elevated volatility and continued foreign selling in Korea equities in the near term.

The Kospi had gained 192 percent over the past 12 months and has now fallen about 20 percent from its peak noted Jefferies analyst Mohit Kumar.

The market movement highlights the crowded semiconductor trade yet also shows the sector must continue delivering solid earnings to sustain the recent rally.

The Agenda

7pm BST: US Federal Reserve minutes