Market Overview

Dear Investor,

Global stocks have had a strong week as markets shrugged off lingering trade concerns and extended their rally. US inflation came in exactly as expected, giving traders fresh confidence that the Fed is likely to cut rates next month. That sense of certainty has flowed through Wall Street and across the globe, lifting indices in Europe and Asia to new highs and reminding investors that sentiment can be a powerful force when data aligns with expectations.

European markets have also enjoyed the tailwind, with the Stoxx Europe 600 and Germany’s Dax posting steady gains. The extension of the US-China trade truce has eased fears of immediate disruption, while expectations of lower US borrowing costs have boosted the markets view on European equities. Investors appear willing to focus on growth potential rather than headline trade noise, driving a mood that feels more optimistic than earlier in the year.

China and Hong Kong have been buoyed by domestic policy support for consumers and businesses, helping local equities recover. A weaker US dollar has added extra fuel to the rally, giving exporters in the region a natural boost. Combined, these factors are supporting the narrative that Asia is in a sweet spot for now: strong external demand, targeted policy support, and the tailwind of lower borrowing costs globally.

Wishing you a fantastic weekend,

Tom

Market Movers

On the rise: Spirax (LSE:SPX) +14.9% on the week

Shares in engineering group Spirax shot higher this week following the release of its half-year results, which showed revenue broadly in line with expectations despite a challenging macroeconomic environment.

Segment performance varied across the business. ETS sales increased, driven by semiconductor demand, WMFTS orders grew in the Biopharm sector, and STS sales were stable organically, excluding large projects in China and Korea. Adjusted operating profit margins were largely unchanged on a reported basis, with organic margins improving slightly, and adjusted cash conversion rose, reflecting disciplined management of working capital and capital expenditure.

The group reiterated its full-year guidance, expecting second-half organic sales growth to accelerate, supported by strong order books and continued demand in high-margin segments. Currency headwinds and restructuring costs are anticipated to persist through the remainder of the year. Operational efficiency programmes and the phasing of benefits from restructuring are expected to contribute to margin improvement and cash conversion in the second half.

REGENCY VIEW:

Spirax continues to deliver a steady mix of quality and momentum, with strong returns on capital and equity underpinning its industrial footprint. Solid margins, healthy forecast earnings growth, and a consistent dividend illustrate a business that balances operational discipline with growth opportunities across its key markets.

On the slide: Sage Group (LSE:SGE) -6.2% on the week

Sage Group’s share price has continued its recent underperformance following its end-July trading update, despite reporting revenue growth across its cloud and AI-powered solutions.

On an organic basis, excluding the impact of acquisitions, total revenue increased 9% and recurring revenue rose 9%, reflecting momentum in Annualised Recurring Revenue (ARR). Cloud-native revenue grew 22% to £645m, and subscription penetration reached 83%, highlighting the continued contribution of recurring software sales to overall revenue. In the third quarter alone, total revenue increased 9% to £620m compared with the same period last year.

This week, European software stocks experienced broad declines, with heavyweight peers such as SAP, Dassault Systemes, and Nemetschek all falling sharply. Sage’s shares were also affected during this sector-wide selloff, coinciding with market concerns over the potential impact of artificial intelligence on the software industry.

REGENCY VIEW:

Sage’s cloud and AI-driven solutions continue to deliver steady growth, supported by a recurring revenue base that now accounts for the bulk of sales. Strong operating margins and a return on equity of nearly 37% underline the efficiency of its business model and the quality of its underlying performance.

Sector Snapshot

Healthcare led the way this week with strong gains, joined by Telecom and Financials in positive territory. Materials and Energy also contributed, while Consumer Staples and Industrials added modest support.

At the other end, Tech posted the sharpest decline, with Real Estate and Consumer Discretionary also under pressure. Utilities slipped too, leaving defensives struggling to find traction in this summer bull market.

UK Price Action

Last week’s range on the FTSE has given way in line with the long-term uptrend. Traders will be watching for a weekly close above resistance at 9,175 to confirm the breakout and reduce the risk of the index slipping back into the previous range.