Daily market update: oil prices, gold, Metro Bank, Entain

“European shares were surprisingly resilient against a backdrop of uncertainty,” says Russ Mould, Investment Director at AJ Bell.

“Helping to prop up FTSE 100 was continued strength in oil prices as tensions remained high in the Middle East. Crude oil rose 1.1% to $72 per barrel, driving shares in FTSE heavyweights BP and Shell and taking the broader market upwards in the process.

“Global oil prices jumped last week after Israel attacked Iran, raising concerns about major disruptions to supply. Despite a weekend of violence between the two countries, investors showed no signs of panicking, judging by movements in financial markets on Monday. Future prices imply a positive day for Wall Street when US markets open later on.

“The gold price is often a measure of investor sentiment, going up when people are worried and going down when they’re optimistic. The precious metal slipped 0.6% to $3,432 per ounce which indicates that investors remain alert to ongoing geopolitical tensions but they’re not reaching for their tin hats.

“The Middle East conflict remains a fluid situation and there is the potential for markets to still experience sudden jolts if the tension escalates further.”

Metro Bank

“Shares in Metro Bank jumped 10% following takeover speculation over the weekend. Pollen Street Capital has reportedly expressed interest in the financial services group, although there has been no official comment from either side.

“Metro Bank has been on a rollercoaster of a journey, becoming one of the fastest growing banking names on the UK high street before going through a rocky patch that resulted in an emergency fundraise.

“Metro has since repositioned itself as a business banking provider and investors have slowly regained confidence in the company. The shares have been on a big run over the past year, albeit only putting them back to a two-year high and still a fraction of 2018 highs.

“With the market now looking more favourably on the business, it’s no surprise to see takeover speculation as strategically, Metro Bank is in a much better place. What’s unknown is the price that a suitor such as Pollen Street would be prepared to pay, as the shares are not cheap versus earnings expectations for 2025. A suitor would need to take a longer-term view of Metro Bank’s potential to warrant paying a big premium to the current market price.”

Entain

“The latest update from Ladbrokes owner Entain revealed why the US is seen as the promised land for UK gambling outfits as its BetMGM joint venture came up trumps.

“The momentum seen in the first three months of the year has continued into the second quarter and, from just about inching into profitability, Entain now sees a meaningful profit coming from the venture. The upgraded guidance lends credibility to its longer-term ambitions for earnings from the venture, too.

“The company’s recovery effort was undermined at the start of the year when chief executive Gavin Isaacs departed just a few months into the job but today’s update will give the market encouragement that a turnaround in its fortunes is still possible under his successor, Stella David.

“Entain turned down a shares and cash offer equivalent to £28 a share from US fantasy sports betting company DraftKings in 2021 and a £14 per share offer from US its joint-venture partner BetMGM a few months earlier and subsequently pursued a questionable acquisition strategy which put pressure on the share price.

“The company still has a long way to go to convince investors staying independent was the right decision but today’s news offers some hope that the US operations can be an engine of growth for the business.”

These articles are for information purposes only and are not a personal recommendation or advice.