Key events

3m agoWizz Air reports quarterly loss amid rising fuel expenses
26m agoWPP shares climb sharply as turnaround efforts advance
1h agoPersimmon raises forecast while relying on Burnham housing plans despite rising expenses
2h agoIntroduction: German factory orders climb more than forecast; Asian shares slip on technology retreat

Wizz Air reports quarterly loss amid rising fuel expenses

Meanwhile, Wizz Air has moved into a quarterly loss following the Iran conflict that drove fuel expenses higher.

The Hungarian budget airline cautioned that the sector faces ongoing difficulties through the remainder of the year.

It recorded an operating loss of €183m (£157m) for April to June, versus a profit of €27.5m in the prior year, even as passenger numbers rose 25% to 21.2 million. Revenues grew 5.5% year-on-year to €1.5bn.

Wizz Air attributed the result to higher jet fuel costs tied to elevated global oil prices after the US-Israeli strikes on Tehran in late February that escalated into extended conflict.

Brent crude reached above $120 a barrel in late April but has since eased as US and Iranian negotiators, aided by intermediaries, seek a peace agreement. Today, Brent is up 0.6% at $79.9 a barrel.

The airline's fuel costs increased 39% from last year to €610.5m, reflecting 87% higher market prices, partly offset by fuel hedges, currency shifts and expense reductions.

Other carriers - easyJet, British Airways owner IAG and Ryanair - have also faced pressure, posting lower profits in recent weeks.

Wizz Air had noted a €50m impact from the Iran conflict after cancelling flights to Tel Aviv in Israel and other routes to the Middle East and Cyprus in March.

Although many flights have restarted, the company indicated it is shifting from longer-haul Middle East destinations to shorter European routes such as Spain, Italy, Croatia and Albania. It added that its exposure to the Middle East remains limited and mainly centres on Israel.

Its chief executive, József Váradi, said:

The sector has seen extreme volatility in the June quarter due to Middle East conflict, higher fuel prices and shifts in booking behaviour.

We are concentrating on reinforcing the main network, boosting density and moving capacity from longer-haul Middle Eastern operations into shorter European routes.

While forward bookings continue to build, the rest of the year is likely to bring both sector challenges and strategic openings.

WPP shares climb sharply as turnaround efforts advance

WPP shares have risen as much as 27%, after the advertising firm stated it remains on schedule with its cost-reduction programme and that the quarterly sales drop was milder than anticipated.

The shares lead gainers on the FTSE 250 and now trade 24.5% higher at 382.5p - heading for their largest daily advance since 1992.

WPP, which creates advertising campaigns via its global agencies including Ogilvy, VML and AKQA, reported a 2.8% like-for-like sales decline in the second quarter due to client losses from last year. It noted an improving trend in spending from current clients and a reduced effect from net new business.

Cindy Rose, the chief executive who assumed the role last summer, said the company was firmly on schedule with the initial phase of its plan to stabilise operations, targeting annual cost savings of £100m.

In February, WPP outlined a major restructuring to address growth in artificial intelligence, including asset sales and job reductions. Aiming for a simpler, lower-cost, AI-enabled model, the London-based firm seeks £500m in annual savings by 2028, at a cost of £400m over two years.

The group aims to return to organic growth next year.

Organic growth stays our central goal. Although the turnaround in financial results will require time to fully materialise, strong new business wins and better client retention, along with progress on cost savings and portfolio moves, show we are creating a simpler, more competitive and stronger-performing WPP.

Analysts at Citi said:

We believe consensus 2026 organic growth forecasts could turn out too cautious after the first-half results. In addition, progress on disposals is encouraging and points to potential hidden value across the wider portfolio.

European shares have opened higher.

The FTSE 100 index in London has gained about 19 points to 10,908, a 0.2% increase, moving closer to the 11,000 mark.

Persimmon ranks among the top risers, up 2.5%, after the UK housebuilder raised its outlook for the year as it expects to gain from Andy Burnham's housing programme - while setting aside rising construction costs linked to Iran conflict disruption.

The Dax in Frankfurt edged up 0.15% while the CAC 40 in Paris climbed 0.7%, the FTSE MiB in Milan rose nearly 0.8% and the Ibex in Spain added more than 1%.

Persimmon raises forecast while relying on Burnham housing plans despite rising expenses

Kalyeena Makortoff

UK housebuilder Persimmon has improved its outlook, stating it is well positioned to benefit from prime minister Andy Burnham's policy direction, despite growing costs tied to the Iran conflict.

The FTSE 100 builder informed investors this morning that pre-tax profits rose 15% in the first half to £168m, after a 13% increase in homes completed during the period.

This occurred despite difficult market conditions, following higher building costs and many buyers still facing affordability issues.

Executives noted that cost pressures are likely to increase in coming months. We anticipate further inflationary pressure in 2027 partly from the Middle East conflict, Persimmon stated in a market update, warning that even its own

It cautioned that cost reduction steps may fall short of fully offsetting inflation effects.

Yet Persimmon said it is raising its full-year outlook, with plans to finish 12,500 new homes by year end, at the upper end of prior guidance.

The housebuilder hopes to gain from Burnham's policy programme, including measures to increase housing supply and reduce costs for budget-conscious buyers.

Persimmon stays well positioned to support further growth through our distinctive capabilities. The UK housing market continues to face long-term undersupply and affordability issues for new buyers, which remains a priority for the new government.

As the most cost-efficient national housebuilder, with clear attention to customer value and affordability, a growing land pipeline and expanding outlet network, we are ready to respond.

Investec housing analyst Aynsley Lammin said:

Markets remain difficult but Persimmon stays proactive and continues to deliver relatively well.

Introduction: German factory orders climb more than forecast; Asian shares slip on technology retreat

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

In Germany, factory orders rose more than expected in June as Europe's largest economy moved past disruption from the Iran conflict.

At the same time, Rheinmetall, the nation's largest defence firm, reduced its outlook after losing a major government contract.

New manufacturing orders increased 3.1% from the prior month, according to Germany's statistics office, comfortably exceeding analysts' forecasts of a 0.3% rise. However, excluding large orders, new orders fell 0.5%.

Over the three months to June, new orders grew 1.3% from the previous three months.

Machinery and equipment led with 12.7% growth alongside computer, electronic and optical products, up 22.7%. Large orders drove both sectors. The car industry posted a 3.8% increase.

In contrast, orders dropped 41.7% for aircraft, ships, trains and military vehicle equipment, with only partial data available in this area so far.

Foreign orders rose 0.2% in June, with euro area orders falling 14% and orders from outside the eurozone rising 10.2%. Domestic orders increased 7.8%.

Meanwhile Rheinmetall trimmed its sales forecast for this year after losing a major German naval contract worth several billion euros.

Rheinmetall now expects annual revenues could reach as low as €13.7bn rather than the previously projected €14bn at the lower end of its targeted range. The arms maker maintained its operating margin forecast.

This follows Germany's cancellation of the F126 frigate programme in June, which Rheinmetall said could cut its revenues by up to €300m.

Asian shares declined on Thursday after the prior day's technology rally, as investors grew cautious once more, following Wall Street where Elon Musk-run SpaceX fell 13.6% and chipmaker AMD dropped 7%.

Both posted strong quarterly results but investors grew concerned about SpaceX's rising AI spending while AMD was affected by Musk stating SpaceX planned to source its AI chips from rival Nvidia. While SpaceX quarterly revenue nearly doubled year-on-year to $7.8bn, capital spending jumped to $18.3bn - more than six times last year's level - with most directed toward AI.

Japan's Nikkei fell 0.9% while Hong Kong's Hang Seng dropped 1.9% and South Korea's Kospi lost 4.6% and China's CSI 300 index dipped 0.3%.

Brent crude holds below $80 a barrel, down 21 cents, or 0.3%, to $79.22 a barrel.

The Agenda

8.30am BST: Eurozone construction PMI for July
9.30am BST: UK construction PMI for July
1.30pm BST: US Initial jobless claim for week to 1 August