The Topix slumped 3.2% to 3,772.17, the fastest decline since April, while the Nikkei declined 3.1% ‌to close at ⁠56,279.05, ⁠the biggest drop since November last year, after falling as much as 3.4%.

“Ongoing gains in crude oil futures on worsening Middle East tensions, together with a stronger U.S. dollar and weaker yen, are fuelling views that inflation could accelerate,” said Maki Sawada, a strategist at Nomura Securities.

“This uncertainty, seen as potentially impacting future monetary ⁠policy, is ‌weighing on the equity market overall.”

The U.S.-Israeli air war against Iran escalated with no end in sight, ⁠as Israel struck Lebanon in response to Hezbollah attacks and Tehran continued launching missiles and drones at Gulf states hosting U.S. military bases.

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All 33 industry subindexes on the Tokyo bourse were down, led by a 5.5% fall in the oil and coal sector followed by a 5.4% decline in the transport equipment industry.
Toyota Motor, the world’s largest automaker ‌by sales, dropped 6.1%, the sharpest drop since September 2024, while Japan’s largest airline, ANA Holdings, fell 3.3%. ENEOS Holdings, Japan’s biggest refiner, lost ⁠6.3%, the sharpest drop since April.

The largest percentage decliner, though, had nothing to do with the Middle East tensions.

Sumitomo Pharma tanked 19.1%, the biggest fall in nearly 12 years, as investor concerns over a new share issuance outweighed an upward revision to its full-year net profit forecast for the current fiscal year.

There were 219 decliners on the Nikkei index against six advancers.

Shop price inflation slowed more than expected in February, offering households tentative relief from cost-of-living pressures as retailers stepped up discounting and global food prices eased.

New data from the British Retail Consortium (BRC) and NielsenIQ showed shop prices rose 1.1 per cent year-on-year in February, down from 1.5 per cent in January. The deceleration reflects intensified competition across both food and non-food sectors, with retailers cutting prices to stimulate demand amid weak consumer confidence.

The figures come ahead of the spring statement, when the Office for Budget Responsibility is due to update its outlook on growth and public finances. They add to recent signs that inflationary pressures are moderating, after official data showed UK consumer price inflation fell sharply to 3 per cent in January, moving closer to the Bank of England’s 2 per cent target.

Food prices remain elevated but are increasing at a slower pace. Annual food inflation eased to 3.5 per cent in February from 3.9 per cent the previous month. Fresh food inflation edged lower, while ambient food inflation, covering products such as coffee, pasta, canned goods and other cupboard staples, fell to 2.3 per cent, its lowest level in four years.

The BRC said lower global commodity costs were filtering through supply chains, helping to stabilise grocery prices. However, it emphasised that competitive dynamics were playing a crucial role, particularly in discretionary categories such as fashion, health and beauty.

Prices for non-food items, including clothing, electronics and household goods, declined by 0.1 per cent year-on-year, compared with 0.3 per cent growth in January. Heavy promotional activity in fashion and personal care, coupled with softer demand due to unseasonal weather and fragile sentiment, contributed to the decline.

Helen Dickinson, chief executive of the BRC, described the slowdown as a “welcome relief” but warned that pressures had not disappeared. She noted that while the pace of price rises is moderating, many households continue to feel strain from higher cumulative costs over the past three years.

Mike Watkins, head of retailer and business insight at NielsenIQ, said pricing behaviour had shifted notably since the start of the year. “Competitive pricing across both food and non-food is helping to bring down inflation,” he said, though he cautioned that demand remains unpredictable as shoppers continue to prioritise essentials and trade down to value options.

The easing in shop price inflation follows a mixed economic backdrop. The government recently reported a record £30.4 billion budget surplus in January, driven by strong tax receipts and lower debt interest payments. Retail sales also surprised on the upside. However, unemployment has climbed to a five-year high and economic growth remains sluggish, tempering optimism.

Retailers have also flagged potential future cost pressures. The upcoming implementation of the Employment Rights Act and higher employment costs could increase operating expenses later this year. Industry leaders warn that if secondary legislation raises labour or compliance costs significantly, businesses may be forced to pass some of those increases on to consumers.

For now, the slowdown in shop price inflation suggests that competitive retail markets and easing global input costs are helping to cushion households. Whether that trend continues will depend on energy prices, wage dynamics and the broader economic outlook in the months ahead.

Jamie Young

Jamie is Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops.

When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs to inspire the next generation of business leaders.

In a statement on Monday, the company said it has signed a Memorandum of Understanding (MoU) with Elematic India, an arm of Finland-based Elematic Group, for sourcing of precast concrete technology.

The MoU was signed on February 19, 2026, in the presence of Petteri Orpo, Prime Minister of Finland and also the Ambassador of Finland Kimmo Lahdevirt.

The agreement was formalised between Veshesh Gaur, Director of Gaurs Group, and Chander Dutta, MD of Elematic India and Teppo Voutilainen, CEO of Elematic Oyj, Finland.

Under the agreement, Gaurs Group will invest Rs 100 crore to set up a precast manufacturing plant in Greater Noida.

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The facility, spread over 5 acre land, will manufacture advanced precast concrete components that would include slabs, columns, beams and walls.
The plant is expected to be operational within six months. Gaurs Group has also placed an advance order to Jindal Elematic, Alwar to supply 45,000 units of modular bathrooms and 10,000 units of kitchen pods for its under-development projects.

The order book is worth Rs 150 crore.

The company intends to integrate technology-led construction practices to improve execution efficiency and reduce project timelines by almost 30 per cent.

Precast construction enables key structural and utility components to be manufactured and assembled off-site in a controlled environment and installed on-site.

Veshesh Gaur said, “Construction technology is becoming increasingly important as the scale and complexity of residential developments continue to grow. Our partnership with Elematic will enable us to integrate advanced precast manufacturing into our construction processes, improving efficiency, quality control and project timelines.”

Gaurs Group is one of the leading real estate developers in Delhi-NCR. It has developed many townships, Group housing and commercial projects.

US technology group Avalara has acquired Manchester-based integration startup Versori in a deal that underscores the growing international appeal of the UK’s regional tech sector.

The value of the transaction has not been disclosed, but it includes Versori’s proprietary technology platform and its 23-strong team. Co-founders Sean Brown and Daniel Jones will remain with the business, which will operate under the name “Versori, by Avalara”.

Founded in 2022, Versori specialises in next-generation integration technology, enabling companies to connect complex systems such as ERPs, ecommerce platforms, marketplaces and financial applications with greater speed and automation. The company raised $10.5 million in prior funding and graduated from the prestigious Y Combinator accelerator programme in March 2023.

Sean Brown said the acquisition aligns closely with Versori’s founding vision.

“We want Versori to connect the world’s systems. That was the mission statement from day one,” he said. “As we were going through a period of growth we were facing doing another investment round, but Avalara were already a customer and the strategic fit was very strong.”

Avalara describes itself as an “agentic” tax and compliance leader, providing automated tax calculation, reporting and compliance solutions to more than 200,000 customers across 75 countries. Its long-term ambition is to embed real-time, always-on compliance into global commerce systems.

Scott McFarlane, chief executive and co-founder of Avalara, said the acquisition would significantly accelerate that ambition.

“Compliance at global scale depends on seamless, reliable integration,” he said. “Versori’s technology and team significantly accelerate our ability to connect into the world’s commerce systems quickly, at scale, using intelligent, AI-driven automation that meets the reliability and accuracy standards global compliance demands.”

The move strengthens Avalara’s unified platform strategy, particularly as regulatory complexity increases worldwide and multinational businesses seek automated, audit-ready compliance solutions embedded directly into transactional workflows.

Versori’s platform uses automation-first architecture to reduce the time and engineering resources required to build and maintain integrations. By leveraging artificial intelligence, the system can simplify deployment and ongoing maintenance, making it attractive to enterprises operating across multiple jurisdictions and platforms.

Since its launch, Versori has worked with high-profile organisations including Frasers Group, Macy’s and the UK Ministry of Defence. Its growth trajectory has made it one of Manchester’s fastest-rising enterprise software startups.

Brown said the acquisition demonstrates that Manchester can produce globally competitive technology businesses.

“It’s proof that Manchester can grow companies like Versori,” he said. “Hopefully it will bring more investment into Manchester and more talent. I’ve never done it for the rewards. I love building things and I’m looking forward to keeping building things with Versori. I’ve got a lot of unfinished business.”

The deal also reflects continued US interest in UK AI and enterprise software firms, particularly those outside London. Manchester’s tech ecosystem has grown rapidly in recent years, supported by university spinouts, venture capital inflows and accelerator programmes.

For Avalara, the acquisition adds advanced AI-enabled integration capabilities at a time when global tax and compliance requirements are becoming increasingly digitised and complex. The company has spent more than two decades building one of the most extensive libraries of tax content and system integrations in the industry. Integrating Versori’s automation technology is expected to enhance speed, scalability and reliability across that network.

Both companies indicated that integration work is already under way, with Versori’s technology forming a key part of Avalara’s push towards AI-native compliance systems that operate continuously and autonomously within global commerce infrastructure.

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.

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