Market report: Surge in gas trading sends Shell higher and Young’s gastropubs pull in the punters
Susannah Streeter, chief investment strategist, Wealth Club: “The Footsie has edged higher, with the index deflecting fresh tech worries, boosted by a robust trading update from the oil and gas heavyweight Shell.
Shares climbed as investors welcomed indications of strong activity in its gas trading and LNG operations. Although the fallout from the Iran conflict has been a double-edged sword, damaging gas infrastructure and disrupting production from Qatar, it’s simultaneously creating more favourable trading conditions amid heightened volatility in global LNG markets. Shell is also being supported by higher energy prices, with oil shifting higher as attention has turned again to the perils of navigating the Strait of Hormuz. An LNG tanker was hit while exiting the narrow waterway, sparking fresh concerns about whether the Iran-US agreement to keep the Strait open will hold. Brent crude edged up 1% to around $73 dollars a barrel, but prices are still trading close to pre-war levels, with mega producer Saudi Aramco cutting the price of Arab light crude oil for some customers next month as supply constraints have eased and oil producing nations turn the taps on full.
Young’s has provided a big dose of cheer, with revenue up 9.4% for the first few months of its new financial year. It’s basking in the sunshine of the summer of sport which has pulled punters in, with extended hours creating even more happy hours for the pub chain. Young’s gastropubs and boutique rooms in characterful locations, including gardens and riverside sites, have proved particularly appealing to locals and visitors who have been enjoying the heatwave. It’s managing to navigate the challenges in the hospitality industry adeptly, with curated offerings making it easier to charge premium prices to offset higher payroll costs.
Elsewhere, another tech wobble appears to be keeping investors on edge, with downbeat sentiment sparking falls in Asia. The Nikkei was hit by another crisis of confidence in the valuations of semiconductor stocks, despite an update from Samsung which forecast another record-beating second quarter. Such are the heady heights the stock has climbed, a miss of analysts’ forecasts has triggered a fresh bout of selling, which infected companies in the sector.
Concerns are still bubbling about stretched valuations and the risks of an AI bubble bursting, which would affect wealth perceptions around the world, given how much capital is tied up in the promises of the artificial intelligence revolution. For now, with such mega sums still being raked in by the big players, whose technology is so in demand, it seems as though these incremental corrections may be the immediate path ahead, as investors try and gauge future demand.”