London's FTSE 100 index declined 52 points to 10,464 on Thursday, even as official data showed the UK economy expanded at its fastest pace in over a year. Gross domestic product rose 0.8% in the three months through May, surpassing expectations and marking the strongest quarterly growth since early 2025. The positive economic news was overshadowed by a weaker pound, which slipped 0.1% to $1.352 after reports that Shabana Mahmood could become the next Chancellor, easing concerns about a sharp leftward policy shift. Gilt yields edged lower, while European stocks and US futures also traded in negative territory.
Takeover Activity Heats Up
UK-listed industrial companies attracted significant foreign interest, with Rotork, Gooch & Housego, and Ramsdens all agreeing to takeover offers. The bids underscore the continued appeal of British firms to international buyers, particularly in the industrial and retail sectors. Peel Hunt noted that UK takeover activity remains elevated, with 154 bids exceeding £100 million recorded so far this year. Analyst Kathleen Brooks attributed some of the market's weakness to the psychological impact of England's World Cup exit, though broader global factors also played a role.
New AIM Listings
The London Stock Exchange welcomed several new securities to its AIM market for smaller companies. Among the additions were Europa Oil & Gas, Frontier IP Group, Galantas Gold, Great Western Mining, NEXT 15 Group, and Quadrise. The exchange listed 96.2 million shares of Europa Oil & Gas and 40.3 million shares of Quadrise, adding depth to the oil & gas, mining, and technology sectors on AIM.
Brookfield Asset Management: Valuation Concerns
Brookfield Asset Management (TSX:BAM) shares have surged 72.4% over the past three years, but the stock now trades about 29% above its estimated intrinsic value of CA$53.37 per share, according to an Excess Returns model. The company's aggressive push into AI-driven data center infrastructure has increased capital requirements and execution risk. Despite the valuation stretch, traditional multiples do not appear demanding. The stock has fallen 12.1% over the past year, underperforming peers, and Simply Wall St's valuation scorecard suggests the current price is not supported by fundamentals or growth outlook.
Morgan Stanley Increases Stake in International Personal Finance
Morgan Stanley has raised its voting rights in International Personal Finance Plc above the 7% threshold, reaching 7.0079% as of July 13. The increase, held through Morgan Stanley & Co. International plc, was disclosed in a regulatory filing after breaching the set ownership limit. The bank's position is held across several units, including Morgan Stanley International Holdings Inc. and Morgan Stanley International Limited. No additional financial instruments affecting voting rights were reported.
US Markets: Inflation Data and Earnings in Focus
S&P 500 futures edged up 0.2% early Thursday after June consumer prices slipped 0.4% and core inflation held steady at 2.6%, suggesting easing price pressures. The 10-year Treasury yield fell to 4.57%, lowering borrowing costs for homebuyers and corporations. Traders are watching to see if lower inflation boosts rate-sensitive sectors like technology and small caps, or drives money into defensive names such as utilities and dividend stocks. Key earnings reports from UnitedHealth, Netflix, and regional banks are on tap, along with US producer price data.
Meanwhile, the Nasdaq opened lower as chip stocks came under pressure, with the Dow and S&P 500 also tracking downward. Asian memory chip stocks tumbled, prompting a trading halt on the Korea Exchange for SK Hynix and Samsung Electronics. The weakness in semiconductors added to global market jitters, with oil prices fluctuating and contributing to an unsettled tone.
Telenor Slashes 2026 Guidance After Weak Q2
Norwegian telecom operator Telenor cut its 2026 outlook after missing second-quarter expectations. Adjusted EBITDA fell 9% to 7.99 billion Norwegian crowns ($826.48 million), below the 8.30 billion crown analyst consensus. The company cited flat revenue in Norway and Finland, rising operating costs, and challenging conditions in Bangladesh. Telenor now expects adjusted EBITDA to be flat to slightly lower, reversing its earlier forecast for low single-digit growth. Shares plunged 12%, the biggest one-day drop since October 2008. The company warned that higher costs will persist into the third quarter, with efficiency measures not taking effect until the fourth quarter. Free cash flow guidance was trimmed to around NOK 10 billion, down from NOK 10-11 billion.
Toho Q1 Earnings and Valuation
Toho (TSE:9602) reported first-quarter revenue of ¥88.7 billion and net income of ¥8.2 billion, with basic EPS of ¥9.81. This compares to a trailing 12-month EPS of ¥57.42 and revenue of ¥364.5 billion. The company's five-year average earnings growth of 15.1% per year underscores recent volatility. Shares trade at a trailing P/E of 23.9, well above the sector average, indicating that the market is pricing in continued growth despite the slower start to the fiscal year.
