Business

UK businesses more vulnerable in new energy crisis as distress levels rise

Published

2 months ago

30 March 2026

UK businesses more vulnerable in new energy crisis as distress levels rise

UK businesses are entering the latest global energy shock in a significantly weaker financial position than during the 2022 Ukraine crisis, raising concerns that the current conflict in the Middle East could trigger a faster and more severe wave of corporate distress.

New data from the Weil European Distress Index shows that financial pressures on European companies had already moved into “distress territory” before the escalation of tensions involving Iran, leaving firms with far less capacity to absorb another energy-driven shock.

The index, compiled by law firm Weil, Gotshal & Manges, tracks the performance of more than 3,750 listed companies across Europe using indicators such as cashflow pressure, debt levels and returns on investment. It recorded a reading of 2.5 ahead of the current crisis, compared with -7 in February 2022, just before Russia’s invasion of Ukraine, indicating a marked deterioration in corporate resilience.

The latest crisis has been driven by disruption to global oil and gas supplies, particularly through the Strait of Hormuz, a key shipping route that carries around a fifth of the world’s energy exports. Escalating tensions, including attacks linked to Iranian-backed groups, have raised concerns about alternative routes such as the Red Sea also becoming unstable.

As a result, energy prices have surged sharply, with Brent crude climbing from around $60 at the start of the year to close to $115 a barrel. The spike is already feeding through into higher costs for businesses, from manufacturing and logistics to food production.

Andrew Wilkinson, a restructuring partner at Weil, warned that the pace of change is a key risk factor.

“If energy prices remain elevated and confidence continues to weaken, we could see stress build more quickly than in previous cycles,” he said.

Among major European economies, the UK is seen as especially vulnerable. The index ranks Britain as one of the most distressed markets in Europe, behind only Germany and France, but identifies it as the most exposed to rising borrowing costs.

The resurgence in inflation, driven largely by higher energy prices, is expected to limit the ability of the Bank of England to cut interest rates, with markets increasingly pricing in the possibility of further tightening.

Higher rates would increase the cost of servicing debt for businesses, many of which are already operating with reduced financial headroom after several years of economic disruption.

The UK’s economic backdrop adds to the concern. Recent data from the Office for National Statistics showed that growth stalled in January, highlighting the fragility of the recovery even before the latest energy shock.

At the same time, unemployment has risen to 5.2 per cent, its highest level since early 2021, further weighing on economic momentum and consumer demand.

The combination of weak growth, rising costs and tighter financial conditions creates a challenging environment for businesses, particularly those with high energy exposure or significant debt burdens.

The outlook is further clouded by global factors. The OECD has already warned that the UK is likely to suffer the largest growth hit among G20 economies as a result of the conflict, underlining the scale of the challenge.

Rising energy costs are also expected to squeeze household incomes, reducing consumer spending and adding another layer of pressure on businesses.

Unlike in 2022, when many companies entered the energy crisis with relatively strong balance sheets and access to cheap financing, today’s environment is characterised by higher debt levels and tighter credit conditions.

This leaves firms with fewer options to absorb shocks, increasing the risk of insolvencies and restructuring activity if conditions deteriorate further.

The latest data suggests that the current energy crisis could unfold more rapidly than previous episodes, with financial stress building at a quicker pace across the corporate sector.

For the UK, the combination of high energy dependence, rising interest rates and weak growth creates a particularly challenging mix.

As the conflict in the Middle East continues to evolve, businesses face a period of heightened uncertainty, one in which resilience will be tested and the margin for error is significantly reduced.

Amy Ingham

Amy is a newly qualified journalist specialising in business journalism at Business Matters with responsibility for news content for what is now the UK’s largest print and online source of current business news.

Business

Japan’s Nikkei tops 67,000 for first time on AI boost; SoftBank becomes Japan’s most valuable firm

Published

2 minutes ago

1 June 2026

NewsAdmin

Japan’s Nikkei tops 67,000 for first time on AI boost; SoftBank becomes Japan’s most valuable firm

Business

Allspring Short-Term High Income Fund Q1 2026 Commentary

Published

8 minutes ago

1 June 2026

NewsAdmin

Allspring Short-Term High Income Fund Q1 2026 Commentary

Finance, banking and investment, Asset allocation, budget management. Business woman calculating financial report, cost control and budgeting with business data graph growth chart. Tax and budgeting — Tippapatt/iStock via Getty Images

Quarterly review

• The fund underperformed the ICE BofA 1–3 Year BB U.S. Cash Pay High Yield Index benchmark for the quarter.

• Duration and curve positioning detracted from performance during the period, while quality allocation, sector allocation, and

Business

Nifty has a positive undertone, but Street waits for a decisive breakout

Published

16 minutes ago

1 June 2026

NewsAdmin

Nifty has a positive undertone, but Street waits for a decisive breakout

Nifty remains in a broad consolidation phase, with support clustered around 23,200–23,300 and resistance near 23,750–24,050, leaving traders watchful for a decisive breakout. While the broader structure stays constructive and buy-on-dips strategies are favoured, sentiment is tempered by repeated hurdles and late-week volatility, keeping the index range-bound with a cautiously positive undertone.

DHARMESH SHAH
HEAD OF TECHNICAL RESEARCH AT ICICI SECURITIES

Where is Nifty headed this week?
The index is undergoing a healthy consolidation in the 23,800-23,200 zone that has set the stage to gradually head toward the 24,500 level in the coming weeks. Strong support is placed at 23,200. Some of the key observations are: Banking, auto, capital goods sectors have set a higher base while the IT sector is showing signs of revival near its decade-long support line. Brent crude oil has broken down below its one-month rising trendline support. Stocks above 50-day and 200-day SMAs within Nifty 500 rose to 68% and 45%. Nifty Midcap index broke out of a three-week consolidation to hit new record highs. Small-cap index bounced off its 52-week EMA base and sits 8% below all-time highs. Trading strategy: Decline towards 23,300-23,400 (Nifty Spot levels) should be used as a buying opportunity for a target of 23,900.

TOP BETS FOR THE WEEK
Tata Power: Buy at Rs 410-424, stop loss at Rs 392, target Rs 470
The stock is rebounding after retesting the April 2026 breakout area of Rs 415. As per the change of polarity principle, the previous resistance is now acting as a strong support, offering a fresh entry opportunity with a favourable risk-reward setup. Sona BLW Precision Forgings: Buy at Rs 600–610, stop loss at Rs 588, target Rs 660.

The stock has witnessed a cupand-handle breakout retest pattern, indicating inherent strength. It is now forming a higher-base formation while sustaining above its cluster of moving averages, signalling a revival of structure in the larger-degree time frame

TANMAY SHAH
RESEARCH HEAD, SIHL

Where is Nifty headed this week?
Nifty remains in a broad consolidation range of 23,200–24,050 with a positive undertone, as long as it sustains above the crucial 23,200 support on a closing basis. Traders can adopt a buy-on-dips strategy with stops at 23,250 and targets near 24,200, though a decisive close below 23,200 would weaken the bullish structure and trigger profit-booking.

Trading strategy: Traders with a moderately bullish outlook may consider a Bull Call Spread for the 9th June expiry by buying the 23,700 Call and simultaneously selling the 24,050 Call. The strategy offers a favourable risk-reward profile of nearly 1:2 while limiting downside risk, making it suitable for the current range-bound yet positive market setup.

TOP BETS FOR THE WEEK:

L&T: Buy at CMP Rs 4,074, stop loss at Rs 3,950, target Rs 4,240- 4,400.

L&T trades firmly above its key moving averages, with a rising RSI and a bullish weekly structure, indicating a favourable risk-reward setup at current levels.

Indian Energy Exchange: CMP Rs 128.31, stop loss at Rs 124.50, target Rs 134-139.80.

The stock has formed a bullish double-bottom near its 50-day moving average, backed by strong volumes.

SUDEEP SHAH
HEAD – TECHNICAL AND DERIVATIVE RESEARCH, SBI SECURITIES

Where is Nifty headed this week?
Nifty remains trapped in a broad consolidation phase, with the monthly chart reflecting indecision through a bearish candle and near-term sentiment tilting slightly bearish after Friday’s late sell-off, though indicators still lack trend strength. The immediate hurdle lies at 23,750–23,800, while support at 23,300– 23,250 is crucial—below which a slide to 23,000 is possible, whereas a move above 23,800 could revive short-term bullish momentum.

Published

1 hour ago

1 June 2026

NewsAdmin

Trent nears record date for 1:2 bonus issue: Should you buy shares for bonus reward? Here’s what experts say

Zudio and Westside-parent Trent shares are nearing their record date of June 4 for its first-ever bonus issue, offering shares in a 1:2 ratio to more than five lakh shareholders, with analysts commenting on whether investors should buy the stock before the record date.

Earlier in April, the Tata Group-company had announced the 1:2 bonus issue along with a Rs 6 dividend and Q4 results. The Tata Group company said it will issue one bonus share for every two shares owned as of the record date. Around 17.77 crore shares with a face value of Re 1 each will be issued as part of the offer.

Trent bonus issue record date

Initially, the company had fixed May 29 (Friday) as the record date to determine the eligibility of shareholders set to receive the payment. Later in the beginning of May, Trent revised the record date for the bonus issue to June 4 (Thursday). Trent plans to allot the bonus shares by June 21, utilising share premium worth Rs 17.77 crore. The company’s total share premium available for capitalisation stood at Rs 1,924.3 crore as of March 31, 2026.

This marks the first-ever bonus issue announced by the Tata Group company. Earlier in June last year, the company announced a dividend of Rs 5 per equity share, while it paid dividends of Rs 3.20 in May 2024 and Rs 2.20 in May 2023. In 2016, it announced a stock split in the ratio of 10:1.

Should you buy Trent shares for bonus reward?

Trent’s bonus issue is not an investment trigger by itself, explained Harshal Dasani, Business Head at INVasset PMS. He added that any investor looking at the stock purely to receive bonus shares is confusing liquidity optics with value creation. “A bonus increases the number of shares and adjusts the price accordingly; it does not change the underlying business, cash flows, or economic ownership,” he said.The real question is whether Trent’s earnings trajectory can keep justifying the valuation, Dasani highlighted, adding that the franchise remains among the strongest consumer discretionary stories in India, with store expansion, clean execution and brand recall working in its favour. “But the market has already priced in a long runway of growth. At this stage, the margin for disappointment is limited,” he added.

Existing shareholders with conviction can let the corporate action pass through, while fresh money needs to be anchored in earnings visibility and valuation comfort, not the bonus record date, according to the analyst. “Chasing the stock only for bonus eligibility is a weak investment argument,” he concluded.

Trent share price

Trent shares have fallen more than 25% in one year to close at Rs 4,224 apiece on NSE on Friday. The stock has declined over 1% so far in 2026. In the longer term, the shares gained over 175% in three years and 412% in five years.

Promoters and the promoter group held a 37% stake in the company, while the public owned the remaining 63%, as per the shareholding pattern as of March 31, 2026, on the NSE. Among promoters, Tata Sons held over 32%, while Tata Investment Corporation owned a little over 4%.

Trent Q4 Results

Trent reported a 26% growth in its consolidated net profit for the quarter ended March 31, 2026, at Rs 400 crore versus Rs 318 crore in the year-ago period. Its revenue from operations, meanwhile, rose 19% YoY to Rs 5,028 crore in Q4 FY26.

Further, Trent’s board of directors also approved the plan to raise additional funds through the issue of equity shares via rights issue or other methods. The company announced an Employee Stock Option Plan (ESOP) to issue nearly 8.89 lakh shares to its eligible shareholders.

Also read: Did LIC shares really crash 50% in one day? Here’s how the bonus math works

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)