Yesterday’s session unfolded calmly, deprived of Wall Street’s customary liquidity. European bourses marked time, posting modest daily moves: +0.06% for the CAC 40, -0.46% for Germany’s Dax, -0.07% for the AEX and -0.03% for the FTSE MIB. Yet this apparent torpor masked notable performances beneath the surface. Switzerland’s SMI reached a fresh all-time high at 13,670 points. The move underscores investors’ appetite for the defensive heavyweights of the Zurich market, often favoured in periods of uncertainty. Meanwhile, London’s FTSE 100 closed at a record 10,474 points. The British benchmark continues to benefit from its heavy weighting in energy and financial stocks, two sectors that underpinned the trend yesterday.

More broadly, Europe’s equity markets are leaning on two sectoral pillars that have enjoyed sustained momentum for months: financial services and defence. Banks and insurers are still drawing support from a favourable rate environment and solid earnings releases since the start of the year. At the same time, defence stocks continue to attract capital. Investors are wagering that military budgets will remain structurally elevated, irrespective of the outcome of ongoing diplomatic negotiations.

Wall Street’s return today inevitably places artificial intelligence back at the centre of the debate. Last week, markets experienced notable tremors, as investors questioned the immediate profitability of the vast sums companies are committing to integrate these new tools. The initial euphoria is giving way to a more rigorous phase of assessment. The market is attempting to distinguish genuine long-term winners from businesses whose models may yet be disrupted. In the meantime, sentiment remains mercurial, capable of swinging from exuberance to despondency within a handful of sessions.

The macroeconomic spotlight today falls on Switzerland. Geneva is hosting two major rounds of diplomatic negotiations that could shape market trajectories, particularly in commodities such as oil. On the one hand, the United States and Iran are resuming talks. The stakes are considerable: any de-escalation could pave the way for sanctions relief and the return of Iranian barrels to the market. On the other, discussions between Russia and Ukraine are also beginning under US auspices. Markets remain suspended on the outcome of these diplomatic efforts. The uncertainty is directly reflected in oil prices. The barrel rebounded yesterday, with traders pricing in a heightened geopolitical risk premium. This bounce comes somewhat paradoxically amid reports that certain OPEC+ members may seek to raise output as early as April in an effort to regain market share.

The corporate calendar gathers pace again after Monday’s pause. In Europe, the mining sector takes centre stage with results from Antofagasta, which will offer a read-across on demand for industrial metals, notably copper, a bellwether for global economic activity. Swedish private equity group EQT is also reporting. In the United States, three names stand out as trading resumes: Medtronic in healthcare, Palo Alto Networks in cybersecurity and Cadence Design Systems in software.

In Asia this morning, the tone is mixed. Volumes remain thin owing to ongoing Lunar New Year celebrations in parts of the region. Tokyo is down around 0.3%, while Australia’s ASX is up 0.24%, buoyed by solid earnings from mining giant BHP Group. Futures on US and European indices point to a cautious open.

Today's economic highlights:

Today's agenda includes: the RBA meeting minutes in Australia; in the United Kingdom, the unemployment rate, average earnings including bonuses, and employment change; the balance of trade in Italy; the ZEW Economic Sentiment Index in Germany and the Euro Area; in the United States, the NY Empire State Manufacturing Index, the NAHB Housing Market Index, and speeches by Fed Barr and Daly; in Canada, the year-over-year and month-over-month inflation rates along with the core inflation rate year-over-year. See the full calendar here.

  • GBP / USD: US$1.36
  • Gold: US$4,909.73
  • Crude Oil (BRENT): US$68.05
  • United States 10 years: 4.02%
  • BITCOIN: US$68,314

In corporate news:

  • Sirius Real Estate plans to raise GBP75 million to fund acquisitions in Germany, focusing on defense-related assets.
  • Fitch placed Schroders on Rating Watch Positive following its acceptance of a GBP9.9 billion takeover offer from Nuveen.
  • Custodian Property Income REIT acquired a GBP35.9 million property portfolio near London, adding 6% to its annual rent roll.
  • Rosebank Industries is in advanced talks for a USD3.05 billion acquisition of two US-based businesses.
  • Persimmon Homes signed a three-year partnership with property website Zoopla to boost buyer inquiries and brand awareness.
  • Plus500 launched a new USD100 million share buyback program to be completed by February 2027.
  • M&G expanded its private equity platform with a USD1.1 billion deal with CVC.
  • Crystal Amber Fund invests an additional USD 8 million to acquire nearly a 98% stake in Morphic Medical Inc.
  • UBS ordered by a Zurich court to provide Credit Suisse shareholders access to internal valuation documents.
  • Ratos' target price raised to 46 SEK by Pareto, while SEB lowers it to 37 SEK.
  • Enagas reports a 2025 profit of €339.1 million, surpassing targets.
  • Kemira plans to build a €20 million activated-carbon reactivation plant in Tarragona, Spain.
  • Hyatt Hotels Corp's Executive Chairman Thomas J. Pritzker resigns, with Mark S. Hoplamazian taking over as Chairman and CEO.
  • Goldman Sachs plans to remove diversity factors from its board-candidate criteria under pressure.
  • Starboard Value plans to push for a significant overhaul of Tripadvisor's board after acquiring a 9% stake.
  • Elliott builds a substantial stake in Norwegian Cruise Line Holdings Ltd. to push for governance changes.

See more news from UK listed companies here

Analyst Recommendations:

  • Persimmon Plc: Rothschild & Co Redburn maintains its buy recommendation and raises the target price from GBX 1680 to GBX 1735.
  • The Berkeley Group Holdings Plc: Rothschild & Co Redburn maintains its neutral recommendation and raises the target price from GBX 4200 to GBX 4450.
  • Zegona Communications Plc: Deutsche Bank maintains its buy recommendation and raises the target price from GBX 1550 to GBX 2200.
  • Glencore Plc: SBG Securities (Pty) Ltd maintains its buy recommendation and raises the target price from GBP 5.80 to GBP 5.90.
  • Gsk Plc: Berenberg maintains its hold recommendation and raises the target price from GBP 16.60 to GBP 20.
  • Ssp Group Plc: UBS upgrades to buy from neutral with a price target raised from GBX 180 to GBX 245.
  • St. James's Place Plc: JP Morgan maintains its overweight recommendation and raises the target price from GBP 17.26 to GBP 17.40.
  • Pennon Group Plc: UBS maintains its buy recommendation and raises the target price from GBX 630 to GBX 650.
  • Astrazeneca Plc: Leerink Partners maintains its outperform rating and raises the target price from USD 216 to USD 219.